S&P 500 Daily Update for Monday July 28, 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

Market Update Summary for Friday, July 25, 2025:
Outlook for Monday, July 28, 2025:
Market Performance:
The S&P 500, NASDAQ, and NASDAQ 100 hit new all-time highs, with the broader market showing positive sentiment but near euphoric levels.
The S&P 500 opened higher, climbed above R1 (6376) and R2 (6389), and closed at R2, up 0.4% with below-average volume.
Positive trends persist across all time frames, but the market appears overextended in short and intermediate terms.
Key Observations:
Earnings Season: Generally positive, supporting market stability, though some stocks see post-earnings sell-offs. Semiconductors continue to underperform.
Sentiment Indicators: Extreme positive readings in StochRSI, Williams %R, CCI, and RSI (short and intermediate terms). The bullish percent index for the S&P is above 70, signaling overbought conditions.
Trade News: Optimism from potential U.S.-EU trade deals and upcoming U.S.-China talks. Interest rates closed at 4.39%.
Economic Data: Durable goods down 9.3% (better than expected).
Margin Debt: High, nearing levels seen during past market peaks (dot-com, 2008, 2021), indicating potential euphoria.
Short Interest: At 2.3%, not extreme but rising, which could fuel a short-cover rally if the market continues upward.
Technical Analysis:
The S&P 500 is far from key moving averages (20, 50, 150 periods), with the boom indicator signaling overextension.
Negative divergences in some indicators (e.g., Chaikin Money Flow, TTM Squeeze) despite new highs.
ADX nearing 40, indicating extreme positive momentum, which often precedes pullbacks.
VIX below 20, with declining volatility, but a spike in put buying suggests some hedging.
Sector Performance:
Tech stocks (Apple, Microsoft, Google) showed mixed results; Tesla up 3.5% after a sharp drop.
Financials and FANG index underperformed; communication and energy sectors lagged.
Growth outperformed value, particularly in large and mid-caps, with small-caps showing slight improvement.
Outlook for Monday, July 28:
No major economic reports expected, potentially leading to slow market action.
Seasonality is neutral to negative, with historical weakness in late July.
Key events to watch: Upcoming jobs data, GDP release, and Fed rate decision (July 30), with markets anticipating no rate change but expecting two cuts by year-end.
Geopolitical developments (trade talks, global tensions) could influence sentiment.
Conclusion:
The S&P 500 remains positive but is showing signs of overextension and extreme sentiment, warranting caution. Investors should monitor pivot points, growth-to-value ratios, and upcoming economic data for potential shifts.

PDF of Slides:
https://drive.google.com/file/d/1bmmu5ya0A3Qi4qldHuoO7SsPlhIvQ9FV/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!