S&P 500 Daily Update for Monday August 18, 2025

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Market Update Summary for Friday, August 15, 2025:
Outlook for Monday, August 18, 2025:
Market Performance on August 15, 2025:
The S&P 500 hit an intraday all-time high at the open (R1 at 6481) but closed lower, down 0.29%, showing weakness and lack of follow-through buying.
The Dow also reached an intraday high but closed down, missing a new all-time closing high.
The S&P 500 chopped around, closing slightly above S1 (6448) after dipping below the daily pivot (6461).
Volume remained below average, typical for summer, with no significant enthusiasm.
Overall, the market remains positive across short, intermediate, and long-term time frames.
Key Observations:
Inflation Concerns: Thursday’s PPI data surprised the markets, raising fears of inflation transferring to CPI. Interest rates rose to 4.33%, nearing 4.5%, impacting market sentiment.
Geopolitical Context: No deal reached in the Putin-Trump summit in Alaska, but talks continue.
Economic Indicators:
Retail sales met expectations (+0.5%), down from prior (+0.9%).
Empire State Manufacturing was stronger than expected (+11.9 vs. 0 forecasted).
Import prices rose (+0.4%), signaling potential inflation.
Industrial production (-0.1%) and capacity utilization (77.5%) met expectations but showed slight weakness.
Consumer sentiment dropped to 58.6% (vs. 61.3% expected).
Sector Performance: Healthcare and staples showed defensive strength, while financials and tech underperformed. Mega caps held up better than small caps, which have lost momentum.
Technical Indicators:
Short-term momentum remains positive but weakened on Friday (e.g., Stochastics, CCI, Williams%R).
Intermediate-term indicators including the Chande Trend Meter moved from overextended to extended, signaling caution.
Long-term resistance at 6468 (weekly pivot) remains unbreached, with the S&P closing just below.
VIX ticked up but remains below 20, indicating lower volatility; skew index suggests expectations of a potential big move.
Market Trends and Concerns:
Growth-to-value ratios are positive but softening, with large caps outperforming mid and small caps.
Financials’ underperformance relative to the S&P raises concerns.
Negative divergences in some indicators (e.g., balance of power) persist but are improving.
Seasonally, August (especially post-election years) tends to be weak, with no positive August going back to 1950.
Outlook for Monday, August 18, 2025:
Key Events:
NAHB Housing Market Index release on Monday.
FOMC meeting minutes on Wednesday, which markets will scrutinize for rate cut signals.
Fed Chair Powell’s speech on Friday could influence sentiment.
Expectations:
Market remains positive but faces overhead resistance at 6468.
Inflation fears and rising interest rates may temper expectations for a September rate cut (from 50 to 25 basis points, or none if inflation data worsens).
Seasonally neutral to positive for August 18, but the week after options expiration is historically down (55% of the time).
Potential Risks:
Weakness in small caps and financials could signal broader market caution.
Geopolitical developments and inflation data may drive volatility.
Failure to break 6468 resistance could lead to consolidation or a pullback.
Conclusion:
The S&P 500 remains positive across all time frames but showed signs of weakness on Friday, with inflation concerns and resistance at 6468 weighing on sentiment. Short- and intermediate-term trends are still positive and constructive, but negative divergences and seasonal weakness suggest caution. Monday’s session will likely focus on upcoming economic data and FOMC minutes, with potential for increased volatility if inflation fears persist.

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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!