S&P 500 Daily Update for Thursday August 7, 2025

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Market Summary for Wednesday, August 6, 2025:
Outlook for Thursday, August 7, 2025:
Market Performance:
The S&P 500 rose 0.73%, regaining the 20-period simple moving average, closing above the daily pivot at 6312 and R1 at 6334, but stalled at the 6350 resistance level.
Volume was above average, indicating participation, but the market showed a lack of strong conviction, with prices drifting after an initial move up.
Mega-cap stocks (e.g., Apple, Amazon, Tesla) performed well, but broader market weakness persisted, particularly in mid and small caps.
Interest rates rose slightly but remain below 4.5% (10-year yield at 4.22%). The dollar weakened, supporting stocks.
Key News and Events:
Apple: Announced a $100B investment in U.S. manufacturing, boosting its stock over 5%. Despite a 25% tariff increase on India (now 50%), iPhones are unaffected, seen as positive for Apple.
Trade/Tariffs: Swiss President failed to reduce a 39% tariff, but this had little market impact. Middle East envoy Steve Witkoff’s meeting with Putin was reported as productive, though details were sparse and had no significant market effect.
Economic Indicators: Mortgage application index rose 3.1% (refinance +5.2%, purchases +1.5%). Consumer confidence aligning with trailing valuations, supporting higher stock prices. S&P 500 earnings growth increased from 8.7% (Q1) to 9.9% (Q2).
Technical Analysis:
Positive Trends: All major indexes (S&P, NASDAQ, Dow, etc.) are in uptrends across all timeframes. The S&P recaptured the 20-period moving average, and growth outperformed value.
Weaknesses: Intermediate-term oscillators (e.g., PMO) remain negative and declining. Advance-decline lines and ratios showed no significant improvement despite the up day. High-beta stocks underperforming low-beta but declined on an up day, and semiconductors are lagging tech.
Volatility: VIX remains below 20 but shows seasonal tendencies to rise in August-October. Fear gauges and put-call ratios ticked up slightly, indicating cautious sentiment.
Divergences: Negative divergences in several indicators (e.g., TTM squeeze, balance of power, bullish percent index) suggest underlying weakness despite the price increase.
Sector Performance:
Strong Sectors: Discretionary (driven by Amazon, Tesla) and tech (Apple, NVIDIA up modestly) outperformed. Communication services also gained.
Weak Sectors: Defensive sectors including healthcare, energy, and real estate lagged. Financials rose but underperforming the S&P, forming a death cross in the financials-to-S&P ratio.
Outlook for Thursday, August 7, 2025:
Key Data: Initial jobless claims, productivity, unit labor costs, wholesale inventories, consumer credit, and a 30-year bond auction are due. These could influence market direction.
Seasonality: August in post-election years has historically been negative, with potential weakness into mid-month. However, widespread awareness of this trend could lead to a contrarian move upward.
Pivot Points: Watch for resistance at 6468 (R1) and support at 6300 levels for the S&P.
Market Bias: Positive but fragile due to weakening trends and lack of broad conviction. One or two strong up days could reverse internal weaknesses, but downside risks remain if negative news emerges.
Conclusion:
The S&P 500 is positive across all timeframes but shows signs of weakening momentum and internal divergences. Investors should remain cautious, monitoring upcoming economic data and trade developments for potential catalysts.

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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!