Deep Dive Update for Monday July 7, 2025

Link to The SPX Investing Program https://spxinvesting.substack.com

Link to The Daily Pivot Newsletter: https://thedailypivotnewsletter.substack.com/

Join to get access to perks:
https://www.youtube.com/channel/UCxlaGAKm2ApEs13O1gWDltg/join

This video is a weekly deep dive into market charts, covering those not used in daily videos, unique informational charts, and IsabelNet blog charts due to scheduling and holiday disruptions. Recorded for July 7, 2025, it highlights:
Market Sentiment: RSI (14 periods) shows markets above 70, indicating overbought conditions but not yet declining. Sentiment is high (78), suggesting caution as markets treat all news positively and dip-buying persists.
Market Performance: S&P 500 and NASDAQ hit all-time highs, driven by large-cap and growth stocks. Small caps are improving but remain undervalued compared to large caps. U.S. stocks are starting to outperform global markets.
Economic Indicators: Recession probability is low (23-24%), with strong employment and controlled inflation. Forward P/E ratios indicate expensive equities, but historical overextensions suggest markets can stay high.
Volatility (VIX): Long-Term VIX is below 20, signaling a positive market. Other volatility metrics (VIX momentum, VIX of VIX) are declining, reinforcing bullish sentiment.
Sector and Asset Trends: Large caps leading over small caps; growth outperforming value. Regional banks show slight improvement but underperforming financials. Gold is in an uptrend but recently pulled back, while energy lacks conviction.
Technical Analysis: Positive trends in short-term and long-term moving averages, with prices above key levels. Momentum stocks are slightly underperforming, and weekly mass index (covered in the weekly video) signals a potential pullback.
Bonds and Yields: No significant inflation concerns, with bond ratios stable or declining. The 10-year to 3-month yield curve briefly inverted, raising minor recession concerns if it rises again.
Global Markets: U.S. stocks are outperforming German DAX, which is near all-time highs. Eurozone bonds outperforming U.S. bonds.
Broad Market Participation: Over 80% of S&P, mid-cap, and small-cap stocks are above their 50-day moving averages, indicating broad strength but nearing overbought levels.
This update emphasizes cautious optimism, noting overbought conditions and high sentiment but no immediate recession signals, with a focus on monitoring employment, yields, and small-cap performance.

PDF of Slides: https://drive.google.com/file/d/1XNr86HSkmVAp9FFI1WZim11XdxIlER_E/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!