S&P 500 Daily Update for Wednesday February 26, 2025

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Summary of the market update for Tuesday, February 25, 2025, and the outlook for Wednesday, February 26, 2025:
The stock market experienced another down day on Tuesday but managed to close above the day's low, showing some resilience. The S&P 500 fell below the 6,000 level, finding support at the 100-day exponential moving average (around 5917) before bouncing back to close slightly below the S1 pivot point at 5960, down 0.47%. Despite the decline, volume was above average, and the market repaired much of the earlier losses from a drop exceeding 1%.
Internally, the S&P showed mixed signals: strength in defensive sectors contrasted with persistent weakness in growth and Mega-Cap stocks, particularly in Discretionary and Tech areas like Tesla (down 8.39%) and Semiconductors. This defensive shift raises questions about whether it's a short-term correction or a longer-term trend reminiscent of late 2021 into 2022. The market is currently negative in the short and intermediate term, testing the 100-day moving average, though the long-term trend remains positive based on the 50-day moving average being above the 200-day moving average.
Key technical levels to watch include 5,900 if the decline continues, or 6,000 if a recovery ensues. Interest rates are dropping (10-year yield at 4.30% from 4.39%) as investors shift to bonds, signaling a flight to safety, though the usual correlation with stocks has weakened recently. Economic data, such as a lower-than-expected Consumer Confidence reading (98.3 vs. 103.1 anticipated) and rising housing prices, added to uncertainty, alongside geopolitical factors like tariff talks and diplomatic tensions over semiconductor restrictions.
Looking ahead to Wednesday, NVIDIA's earnings report will be released after the close and could significantly influence market direction—potentially reviving Mega-Cap interest if positive, or deepening the decline if disappointing. Upcoming economic releases include mortgage applications and new home sales, with the core PCE inflation report looming on Friday. Seasonality suggests a neutral-to-positive bias for February 26, though post-election year trends indicate February weakness.
Sentiment is currently extremely negative, with the VIX spiking above 20 intraday (closing below) and short-term indicators like StochRSI and Stochastics showing oversold conditions. While this could hint at a potential bounce, the developing negative trend and defensive posture suggest caution. The long-term outlook remains positive, supported by internal S&P strength in non-Mega-Cap stocks, but the immediate focus is on whether support levels hold or growth stocks regain favor.

PDF of Charts and Slides used in today's video:
https://drive.google.com/file/d/1aaW3wEzGh8svj1xI0ePhRYhhVZpV6J5_/view?usp=sharing
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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!