Deep Dive Update for Monday May 5, 2025

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The Deep Dive Update for May 5, 2025, is a weekly analysis of various financial charts used to assess market conditions.
Key points include:
VIX Analysis: The VIX (market volatility index) has risen in 2025 as stocks declined but remains below the critical 20 level. A higher VIX indicates a negative market climate, while a lower VIX suggests positivity. Additional VIX-related studies (e.g., RSI, VIX correlation with S&P 500, VIX of VIX ratio) show no extreme signals, confirming a cautious market environment.
Other Volatility Indicators:
SKEW Index: Not in the critical zone, indicating no immediate concern.
Ulcer Index: Below its moving average, reflecting recent stock market recovery.
Landry Volatility: Flat, showing minimal volatility shifts.
VIX vs. MOVE Index: The stock-to-bond volatility ratio is declining, suggesting stabilizing markets.
Market Performance:
Large vs. Small Caps: Large caps (Russell 1000) are outperforming small caps (Russell 2000), with small caps being the weakest segment.
Market Gains: The S&P 500 is up 62.73% from its October 2022 low and 38.57% from its October 2023 low.
Technical Alerts: Recent days show more positive (green) alerts than negative (red), especially after April 30, 2025.
Index Rankings (0-100 scale):
NASDAQ 100 (QQQs): 67.3 (strongest, improving).
S&P 500: 51.5.
NASDAQ Composite: 48.8.
Dow: 30.5 (resilient but weak).
Mid-Caps: 19.9.
Small Caps: 10.9 (weakest, slightly improving).
Trend Indicators:
Rainbow Charts: Short-term and intermediate-term trends show recovery attempts, with prices trying to move above moving averages.
Bollinger Bands: %B indicator shows a positive crossover, but not extreme.
Proper Order: Still indicates a downtrend despite recent upticks.
Market Levels:
The S&P 500 is 5.43% below its all-time high, recovering from a correction (Greater than10% decline).
Intraday bear market territory (Greater than 20% decline) was hit but not sustained on a closing basis.
Long-Term Momentum:
Special K Indicator: Long-term momentum is negative but improving.
Long-Term Rainbow: Shorter moving averages are declining, but longer ones are holding, with prices nearing the 200-day moving average (potential resistance).
Global Comparisons:
German DAX is outperforming the S&P 500 in 2025, with a neutral correlation currently.
Eurozone stocks are stronger than 3-7 year bonds.
Sector and Bond Analysis:
Banks/Financials: In a downtrend, with regional banks underperforming larger financials.
Bond Market: Ratios (cash to bonds, TIPS to treasuries) suggest no major concerns about inflation or interest rates.
Yield Curve: The 10-year to 2-year curve is normalizing, while the 10-year to 3-month is at breakeven, with potential recession signals being monitored.
Broad Market Measures:
NASDAQ 100 VIX (VXN) is declining as the index rises.
Growth vs. value and Dow vs. transports show no significant divergences.
Stocks above 50-day moving averages are turning positive, while those above 200-day averages are still below 50 but improving.
There is currently cautious optimism, noting market improvements but persistent weaknesses, particularly in small caps, closely monitor volatility and yield curves.

PDF of Charts and Slides used in today's video: https://drive.google.com/file/d/1dWUhsY1twu-sMhYvMIjNXLl8jjWGwUSH/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!