Deep Dive Update for Tuesday September 2, 2025

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The "Deep Dive Video Update" is a weekly video where underutilized or unique charts are analyzed to provide deeper market insights, distinct from the daily videos. Prepared for September 2, 2025, it covers various technical indicators:
1. Long-Term VIX (Volatility Index): The VIX is declining, indicating reduced market fear as the S&P sets new highs. Its 50-period EMA shows a downward trend, and momentum (via MACD) is flat, suggesting no significant movement. RSI 9 is neutral, not showing extreme readings.
2. VIX Correlations and Ratios: The VIX-to-S&P correlation is low, and the VIX-to-VVIX ratio is decreasing, both positive signs. The Ulcer Index is below its moving average, indicating low market stress. The stock-to-bond volatility ratio is also declining, supporting a positive outlook.
3. Market Ratios: The large-cap-to-small-cap ratio is dropping, with small caps benefiting from potential interest rate cuts and a stable economy. The risk-on-to-risk-off ratio is flat, showing no clear trend. Percentage gains since 2022, 2023, and April 2025 lows are monitored, with the S&P 8.4% above its 200-day SMA, not yet overextended.
4. Advance-Decline Studies: The S&P and NYSE advance-decline lines are near highs, with the NYSE showing broader market strength, especially in volume. Momentum in the S&P is neutral, and U.S. stocks have been slightly outperforming international stocks recently .
5. Index Rankings: The Nasdaq leads at 84.8, followed by small caps at 84.2, QQQs at 74.9, S&P at 66.7, mid-caps at 55.1, and the Dow at 52.7. Small caps are improving due to favorable conditions for lower interest rates.
6. Moving Averages and Trends: Short-term (20-period) and intermediate-term (50-100 period) trends are positive, with the S&P above key moving averages. The Ichimoku cloud and Special K indicators confirm bullish trends.
7. Other Indicators: The Nasdaq 100 volatility (VXN) is declining, and growth-to-value ratios are neutral. Dow Theory shows transports lagging, a potential non-confirmation. Financials and regional banks are improving but underperforming the S&P longer-term. Gold-to-stocks and emerging-to-developed market ratios are flat.
8. Bonds and Inflation: Bond market signals suggest low concern about inflation or rising rates. TIPS-to-bond ratios are declining, and short-term treasury yields (2-year) are falling, supporting equity markets. The S&P-to-long-term bond correlation is neutral.
9. S&P 500 Stocks: The percentage of S&P stocks above their 200-day SMA is above 50 and rising, indicating broad strength. The SPY-to-staples ratio is at new highs, reinforcing a bullish outlook.
Overall, the charts suggest a positive market environment with low fear, stable trends, and small-cap strength, though some caution is warranted with upcoming economic data such as the employment report.

PDF of Slides:
https://drive.google.com/file/d/1V4R5hPQYj4NpTxE0FcXHaq9RveTxb--O/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!