S&P 500 Daily Update for Friday May 9, 2025

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Market Summary for Thursday, May 8, 2025, and Outlook for Friday, May 9, 2025
Thursday Market Recap:

Market Performance: The market opened with a gap higher, driven by optimism from a U.S.-UK trade deal announcement, leading to a strong start with the S&P hitting above 5,700 (R2 at 5,698). However, late-day selling by professionals erased much of the gains, closing at R1 (5,664) with a modest +0.58% gain.

Trade Deal Impact: Initial enthusiasm for the U.S.-UK deal faded as details revealed it was more a framework than a substantive agreement, raising skepticism about upcoming U.S.-China talks. Reports of potential tariff reductions on China (to 50%) had little market impact.

Technical Indicators:

Short-Term: Positive, above 20 and 50-period moving averages, with strong momentum (e.g., Stochastic RSI, CCI 20 extreme positive). However, late-day selling and a trendless ADX (Below 20) signal a choppy environment.

Intermediate-Term: Positive, above 50-day moving average, with improving indicators like TTM Squeeze turning positive, but extreme positive.

Long-Term: Negative, below 200-day moving average, with a recent death cross confirming a downtrend.

Volume and Volatility: Volume remained below average, reflecting low conviction. VIX dropped to 23.55 but remains above 20, indicating heightened volatility compared to 2023-2024.

Economic Data:

Weekly jobless claims fell to 228,000 (better than expected 238,000), suggesting labor market stability.

Q1 productivity dropped 0.8% (worse than -0.4% expected), and unit labor costs rose 5.7% (above 4% expected), helping push interest rates up (10-year yield at 4.37% from 4.28%).

New York Fed’s April survey showed stable 1-year inflation expectations at 3.6%, with 3-year expectations up to 3.2% and 5-year down to 2.7%.

Sector Performance: Growth outperformed value, with tech, financials, and cyclicals (industrials, materials) leading. Defensive sectors (staples, healthcare) lagged.

Key Levels: S&P 500 failed to hold above 5,700 (psychological resistance) and closed below R2, with support at R1 (5,650-5,664). Round numbers (5,600, 5,700) and levels such as 5,720 acting as resistance.

Friday Outlook:

Market Sentiment: Short and intermediate-term positive, but long-term negative. Late-day selling and trendless ADX raise concerns about sustainability. No major economic reports due, so focus will be on trade developments (U.S.-China talks) and geopolitical events (Russia-Ukraine, Israel, Pakistan-India).

Key Levels to Watch: Pivot points for Friday include R1, R2, S1, S2 (check YouTube community tab for specifics). Staying above 5,575 (weekly pivot) is critical for long-term positivity; falling below could signal bearish momentum.

Seasonality for Friday May 9, 2025: Dow negative, S&P neutral to negative, NASDAQ neutral to positive. Post-election year data suggests slight weakness.

Indicators to Monitor: Watch for follow-through in growth-to-value ratios, discretionary vs. staples, and financial sector strength. VIX below 23 would signal easing fear, but above 20 remains a concern.

Conclusion:

Thursday’s market showed early strength but faltered due to late selling and skepticism about trade deals, closing with modest gains in a trendless environment. Friday’s outlook is cautious, with no major catalysts expected, and the market vulnerable to whipsaws from trade or geopolitical news. Long-term bearish signals persist, despite short-term resilience.

PDF of Charts and Slides used in today's video: https://drive.google.com/file/d/1iH0i5Mrwb5_xef5oCWdw2CJMIKAP2Bt0/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!