What to Watch Update for Monday September 29, 2025

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The video provides a market update for the weekend, analyzing charts to assess the stock market's condition as of September 29, 2025, with a focus on whether September's typical seasonal weakness will persist or if the market can avoid it with only two trading days left. The analysis is divided into three categories: positive, negative, and areas to watch, evaluating their potential impact on stocks for the upcoming week.
Positive Indicators:
S&P 500: Ended slightly up on Friday, close to all-time highs, maintaining an uptrend with higher highs and lows, though volume was below average, signaling caution.
VIX (Fear Index): Below 20, trending lower, indicating low market fear, which is positive.
Sentiment Gauges: The volatility risk premium and SPX/Vix Correlation is flashing a warning sigh not seen in other sentiment gauges. The stock-to-bond volatility ratio shows some caution but remain positive. The individual investor survey has turned slightly positive, suggesting room for upside as investors aren’t overly exuberant.
Risk-On/Risk-Off Ratio: Still positive, though showing slight declines, indicating a preference for growth stocks.
Mid-Caps and Growth/Value Ratios: Mid-cap growth outperforming value, and discretionary sectors holding up better than staples, signaling a risk-on environment.
Advance-Decline Line: Volume is outperforming price, suggesting underlying conviction in the uptrend.
Smart Money Indicators: Accumulation/distribution & Chaiken Oscillator are positive but the Chaiken Money Flow is negative.
Trend Indicators: Short, intermediate, and long-term trends remain positive with green lines above red lines in ADX charts.
Moving Averages: The S&P is above key moving averages (20, 50, 100, 200 periods), with the 20-period acting as support.
Sector Performance: NASDAQ, small caps, mid-caps, and broad market indices including the S&P 500 are in uptrends. Semiconductors and tech are outperforming bonds, and the market anticipates a soft landing (no recession).
Negative Indicators:
Weekly Performance: The S&P was down 0.31% for the week, with three down days (Tuesday, Wednesday, Thursday) before a Friday rebound.
Small-Cap Growth/Value: Small-cap growth underperforming value, below moving averages, signaling weakness.
High Beta/Low Beta Ratio: Declining, indicating a shift toward defensive stocks but longer-term positive.
Sentiment Decline: Intraday sentiment dropped during the week, though it rebounded slightly on Friday.
McClellan Oscillator (NYSE): Below zero, showing broader market weakness and negative divergences.
Parabolic SAR (Daily): Turned negative, with dots above price, suggesting short-term bearishness.
Home Construction/Bonds Ratio: Declining as 10-year yields rise, despite Fed rate cuts, reflecting market concerns.
Areas to Watch:
Jobless Claims: Weekly claims dropped, which could question further Fed rate cuts, causing mixed market reactions.
10-Year Yield: Rising after Fed rate cuts, defying expectations, which could pressure stocks if it continues.
Inflation Concerns: Ratios including cash to bonds and TIPS to bonds show the market isn’t overly worried about inflation but are worth monitoring.
Sector Ratios: Staples/tech and tech/utilities ratios show mixed signals; biotech is positive, but hotels/utilities are weak.
Bellwether Industries: Semiconductors are stable, but home builders, transports, retail, and regional banks lack strength.
Oil and Gold: Oil is in a downtrend and watched for geopolitical risks; gold is outperforming the S&P slightly.
Emerging Markets: Outperforming developed markets, a positive shift to monitor.
Dollar and German DAX: The dollar is in a short-term uptrend but a long-term downtrend, aiding stocks. The DAX is weakening, falling below its 50-day moving average.
Seasonality: September has avoided typical weakness, but the end of the quarter and October’s historical volatility (e.g., 1929, 1987) warrant caution.
Key Takeaways:
The market is holding up well, close to all-time highs, with positive trends in major indices and low fear (VIX). However, cracks are appearing with below-average volume, negative divergences, and defensive shifts in some ratios.
September has defied historical weakness, but October’s potential volatility and rising 10-year yields are concerns.

PDF of Slides:
https://drive.google.com/file/d/1oz0YYd9vuyaF96BIJ3g5zo9ThrfVJUPg/view?usp=sharing

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!