S&P 500 Daily Update for Tuesday August 12, 2025

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Market Update Summary for Monday, August 11, 2025, and Outlook for Tuesday, August 12, 2025
Monday's Market Action:
The S&P 500 opened higher, with the SPX futures showing mild positivity, but saw significant selling after reaching an intraday high at R1 (6405). Prices declined below the daily pivot (6380) and found support at S1 (6365), closing down 0.25% with below-average volume.
Despite the decline, the S&P 500 remains above the 20, 50, and 200-period moving averages, indicating a positive trend across short, intermediate, and long-term timeframes.
Key sectors: NASDAQ and NASDAQ 100 hit intraday all-time highs but closed lower. S&P 500 briefly surpassed 6,400. Semiconductors (e.g., NVIDIA, AMD) weakened, while Micron and Intel performed strongly. Financials underperformed relative to the S&P, raising potential concerns.
Key Influences:
Geopolitical and Economic Factors: The markets are digesting tariff extensions, a 90-day U.S.-China tariff truce, and upcoming talks between Trump and Putin in Alaska to discuss Ukraine. No major market reaction on Monday.
Economic Reports: No reports were released on Monday, but the Consumer Price Index (CPI) is due Tuesday, an hour before the market opens, and is considered the second most important economic report after employment data. Other upcoming reports include PPI, retail sales, and consumer sentiment.
Rate Cut Expectations: The FedWatch tool suggests a likely 25-basis-point rate cut in September, with Vice Fed Chair Michelle Bowman indicating three potential cuts in 2025, citing a softening labor market. Interest rates slightly declined (10-year yield at 4.27% from 4.29%).
Market Sentiment and Indicators:
Negative divergences continue (e.g., S&P rising while summation indexes and other oscillators are declining).
The parabolic SAR turned positive, but the Change Trend Meter is the only indicator showing extreme readings, and it declined on Monday.
The VIX ticked up slightly but remains below moving averages, indicating lower volatility.
Growth outperformed value slightly, but small and mid-caps underperformed.
Seasonal and Historical Context:
August and September are historically weaker months, especially in post-election years, with no positive August going back to 1950. However, the expected seasonal weakness has not yet materialized.
Options expiration on Friday may influence market dynamics.
Tuesday Outlook:
CPI Release: Expected to significantly impact market direction. A positive report could negate negative divergences, while a disappointing report might amplify weaknesses.
Pivot Points: R1 at 6,468 as a critical level to watch for potential algorithmic trading triggers.
Market Conviction: The S&P 500 continues to lack strong conviction, with a weakening short-term trend and negative divergences suggesting potential intermediate-term weakness. However, the long-term trend remains positive.
Geopolitical Risks: Developments from the U.S.-China tariff truce and Trump-Putin talks could influence market sentiment if significant news emerges.
Conclusion:
The S&P 500 is positive across all timeframes but showing signs of short-term weakness and negative divergences. The CPI report on Tuesday will be critical, potentially driving the market higher or exacerbating underlying weaknesses. Geopolitical developments and upcoming economic data (PPI, retail sales) will also play a role. Investors should monitor pivot points and key indicators for signs of conviction or further softening.

PDF of Slides:
https://drive.google.com/file/d/1xBl1cWKdyp-f15nbmcQYz0Qq2eJYAIFB/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!