InterMarket Analysis Update for September 15, 2025

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The intermarket analysis video update, prepared for September 15, 2025, provides a comprehensive review of market conditions, highlighting no significant changes from the previous week. The market remains positive but is entering a seasonally weak period, particularly the second half of September, historically the worst-performing period since 1950. Despite this, there’s no strong buying enthusiasm or convicted selling, suggesting a cautious market.
Key Points:
Valuation: The S&P is overvalued, with a PE ratio above 20 (historical and forward-looking), and Robert Shiller’s CAPE ratio at 39.56, indicating high valuations but not used for timing.
Growth vs. Value: Growth continues to outperform value across ETFs and indexes, though small-cap growth-to-value ratios show some weakness.
Inflation: Mixed signals—daily and weekly CRB index charts show no drastic moves, but a proprietary inflation-to-deflation ratio is rising, raising mild concerns. The Baltic Dry Index is up but not breaking out, and TIPS outperforming, suggesting tempered yet existing inflation expectations.
Other Markets: Commodities such as aluminum, corn, wheat, and lumber are in downtrends, while oil is declining. Copper shows weakness but is attempting a recovery. Gold and silver are strong, with gold hitting all-time highs and silver outperforming gold.
U.S. Dollar: In a downtrend, which supports stock market gains, as stocks prefer a weaker dollar. The euro and British pound are up against the dollar, while the yen is flat.
Indexes and Sectors: The S&P and NASDAQ are setting all-time highs, with mega-caps driving performance. Small caps and transports underperforming, showing non-confirmation in Dow theory. Semiconductors and AI ETFs show promise but aren’t leading strongly. Communication and tech sectors are strong, while financials and real estate are underperforming the S&P.
Bonds and Yields: Bonds are in uptrends, with stocks outperforming bonds. The 10-year yield has been establishing a higher range over the last few years, and junk bonds are showing risk appetite but recent weakness. Anticipation of Fed rate cuts is lowering yields.
Correlations: Stocks are moving opposite to the dollar, oil, and yields, supporting equity gains. Stocks and bonds currently show high correlation, moving together.
Positive/Negative List: Most assets (stocks, bonds, gold) are in uptrends, with the U.S. dollar as the only major asset in a downtrend.
Outlook: The S&P 500 is positive but cautious, with overvaluation and seasonal weakness as concerns. No major defensive shifts are evident, but small-cap and financial sector weaknesses warrant monitoring. Inflation signals are mixed but not showing any real concerns, and the dollar’s downtrend is supporting stocks. The analysis emphasizes watching for pullbacks and shifts in intermarket dynamics.

PDF of Slides:
https://drive.google.com/file/d/1gh3QIxsyIHuQrpo2DItsfB8ANYHnC9d4/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!