S&P 500 Daily Update for Thursday September 25, 2025

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Market Summary for Wednesday, September 24, 2025:
Outlook for Thursday, September 25, 2025
Wednesday's Market Performance:
MegaCaps and Indexes: MegaCap stocks underperformed, dragging down major indexes. The market saw a 0.28% decline, with a loss of short-term positive momentum. Despite the dip, the decline lacked strong conviction, as trading volume was below average.
Price Action: The market opened higher but quickly fell below the daily pivot (6667) and S1 (6634), finding support around 6625. It closed slightly above S1, off the day's lows.
Volume and Sentiment: Below-average volume was seen as mildly encouraging, but positive conviction is fading. Sentiment remains positive but is trending lower (from 60s to 57), and fear gauges such as the S&P-to-VIX correlation and volatility risk premium are rising, signaling increased market nervousness.
Interest Rates and Dollar: Interest rates rose to 4.15% (not yet concerning unless they hit 4.5%), and the dollar strengthened, potentially pressuring stocks if trends continue.
Sector Performance: Energy and utilities outperformed, while tech and communication lagged. Growth stocks underperformed value stocks across large, mid, and small caps.
Key Indicators: The market remains above the 20-period moving average, but short-term weakness is evident. Negative divergences in indicators such as accumulation distribution, Chaiken Money Flow, and McClellan Oscillators suggest growing downside risks. The VIX was slightly down, but other sentiment gauges indicate rising caution.
Economic and Geopolitical Context:
Fed Speak: Fed's Austin Goolsbee expressed no expectation of a recession but suggested caution on further rate cuts, creating mixed market signals.
Economic Data: New home sales exceeded expectations at 800,000 (vs. 650,000 forecast), and mortgage applications rose 0.6%, though down from the prior week's 29.7% surge. Declining home prices may be aiding sales.
Geopolitical Factors: Not significantly impacting markets currently.
Technical Observations:
Moving Averages: The S&P 500 is still above the 20/50-period and 200-day moving averages but is 10.46% above the latter, historically a level that often precedes pullbacks.
Pivot Points and Support: The market is above the gamma flip point (6577) and R1 support (6468). A drop below these could signal further negativity.
Seasonality: September's weak seasonality could be playing out, with negative trends historically expected in the latter half of the month.
Outlook for Thursday, September 25, 2025:
Key Economic Reports: Initial and continuing jobless claims, GDP (third look with growth and inflation components), durable goods, advanced international trade in goods, and wholesale/retail inventories. Positive data could support a market rebound.
Friday’s Core PCE: The core PCE report on Friday will be critical, potentially influencing Fed rate cut expectations for October and December.
Market Outlook: The S&P 500 remains positive in the long term but is showing short-term and intermediate-term weakness. Watch the 20-period moving averages for support. A significant down day could shift momentum more negative. Defensive sectors and rising interest rates/dollar may add pressure if trends persist.
Conclusion:
The S&P 500 is in a short-term fragile state, with fading positive conviction and rising negative divergences. While still above key support levels, further declines could test the 20-period moving average. Upcoming economic data will be pivotal in determining whether the market regains momentum or continues to weaken.

PDF of Slides:
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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!