Deep Dive Update for August 18-22, 2025

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

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

Link to Video-Only Immediate Access:
https://spxvideos.substack.com/

In this weekly deep dive video update, various charts are used to gain insights into market trends, focusing on longer-term daily and weekly charts not always used in daily updates.
Key points include:
VIX Analysis: The Long-Term VIX (volatility index) is below 20, indicating a lower volatility range, which is generally positive for stocks. A 50-period exponential moving average shows a downward trend in VIX, suggesting bullish market sentiment. Momentum (via MACD) is sideways, and RSI (9) is near the midpoint, indicating no extreme movements. The VVIX (volatility of VIX) and its ratio with VIX are declining, also a positive sign.
Sentiment and Ratios: The Ulcer Index is below its moving average, signaling lower risk. The stock-to-bond volatility ratio is decreasing, which is positive. The large cap-to-small cap ratio is sideways, showing no clear outperformance by either. High-beta stocks (e.g., Apple, Nvidia) did show strong conviction this last week, and risk-on vs. risk-off sentiment is neutral.
Market Performance: The S&P 500 is below the 10% threshold above its 200-day moving average, unlike 2023 and 2024 when it exceeded this, leading to pullbacks. Anchored moving averages suggest support levels, and the advance-decline line for the S&P shows a slight negative divergence in volume vs. price.
Sector and Index Insights: Large cap growth is near all-time highs, but momentum stocks are underperforming slightly. U.S. stocks are improving but underperforming internationally. The NASDAQ leads with an 83.7 score, followed by QQQs (79) and S&P (71.4), while small caps (47.9) and mid-caps (17.8) lag. The Dow hit an intraday high but remains below 50.
Technical Indicators: Short-term and intermediate-term rainbow moving averages (10-100 periods) are positive, with prices above rising lines. The Boom Indicator shows the S&P is far from its 50-period moving average, suggesting potential for a pullback. Other indicators including the Connors RSI, Mass Index, and Bollinger Bands show neutral or no extreme signals.
Other Markets and Ratios: The German DAX correlates with the S&P but is not at new highs. Retail is in an uptrend but not outperforming the S&P. Discretionary vs. staples and tech vs. utilities ratios show slight improvements. Bellwether industries (e.g., semiconductors, homebuilders) are mixed, with homebuilders improving but recently stalling. Regional banks are in a downtrend relative to the financial sector.
Bonds and Yields: Bond yield ratios (e.g., cash to 3-7 year bonds, TIPS vs. bonds) show no major inflation concerns. The S&P and QQQs show weakening correlations with long-term bonds, and the 2-year yield is declining.
Overall Outlook: The market remains positive, with no major warning signs. However, negative divergences (e.g., advance-decline volume, common stock) and potential defensive shifts (e.g., growth-to-value ratios) warrant monitoring.

PDF of Slides:
https://drive.google.com/file/d/1F5qBOxVKLDXHc89daLfAVVKI6x_sTYsB/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!