What to Watch Update for Monday June 23, 2025

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What to Watch Update
Prepared for June 23, 2025

This section highlights key technical and fundamental factors to monitor, with a focus on geopolitical escalation (e.g., U.S. military involvement in Iran) and its potential to disrupt markets as futures open Sunday evening and trading resumes Monday.

Positive Indicators

Growth vs. Value: Large-cap growth continues to outperform, with intraday and end-of-day charts holding above moving averages. Small/mid-cap growth-to-value ratios are stable.

Market Trends: High-beta stocks (e.g., Amazon, NVIDIA) outperforming low-beta, signaling risk-on sentiment. Weekly S&P 500 charts show higher highs and lows, with short-term support (20-period MA) holding Friday.

Technical Indicators: Advance-decline lines are above moving averages, stocks above 50/100-day moving averages remain strong, and new highs/new lows are positive.

Sectors: Financials and FANG index are resilient, with staples underperforming tech, favoring growth. Stock-to-bond ratios suggest a soft landing.

Broad Market: NASDAQ, Wilshire 5000, and total U.S. stock ETFs are above key moving averages, with potential golden crosses forming.

Negative Indicators

Market Performance: The S&P 500’s 0.15% weekly decline and resistance at 6,050 signal indecision. Friday’s options expiration added volatility.

Sentiment and Trends: Sentiment is turning negative, with short-term (20-period) and intermediate-term (50-period) trends weakening. The VIX above 20 suggests negative annualized returns.

Smart Money Indicators: McClellan oscillators and volume-based summation indices are declining, with all three smart money indicators negative.

Oscillators: Short-term (TSI) and intermediate-term (MACD, PMO, PPO) oscillators are turning negative, though long-term (TRIX, KST) remain positive but weakening.

Sectors and Indices: The Dow struggles at its 200-day MA, small/mid-caps are weak, semiconductors face policy risks (e.g., China export waivers), and home construction remains negative.

Things to Watch

Geopolitical Impact: U.S. military actions in Iran could spike oil prices (currently mid-70s), especially if Iran restricts the Strait of Hormuz. Monitor European markets and Monday’s U.S. open for reactions.

Economic Indicators: Stable jobless claims but rising continuing claims (below 2 million) and a briefly inverted 10-to-3-month yield curve signal caution. The 10-year yield below 4.5% is positive.

Market Dynamics: Cash vs. bond ratios lack conviction on rates or inflation. Junk bond spreads are stable, indicating low fear. The semiconductor-to-Dow ratio is improving but vulnerable.

Other Markets: The U.S. dollar’s downtrend (below 99) supports other currencies. The German DAX, in a solid uptrend, is testing its 50-day MA. U.S. stocks are slightly outperforming international markets.

Conclusion

The SPX is showing mixed signals, with growth stocks and broader indices holding up but facing resistance and weakening trends. Geopolitical risks, particularly oil price spikes, could drive early-week volatility. Monitor S&P 6,050, key moving averages, and sector performance (e.g., semiconductors, financials) closely.

PDF of Slides: https://drive.google.com/file/d/1E625HiImrwWQWe0JjYdgH_lyfX8JM06H/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!