Deep Dive Update for Monday September 22, 2025

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Summary of the Deep Dive Video Update for Monday, September 22, 2025
The weekly deep dive video analyzes stock market charts not covered in daily videos, focusing on longer-term insights and informational indicators rather than direct decision-making tools. Key points include:
1. VIX (Volatility Index):
The Long-Term VIX 50-period exponential moving average is below 20 level and declining, indicating a positive market environment. Historically, lower VIX ranges align with bullish markets (e.g., post-2022 bear market recovery).
Despite all-time highs in the S&P and NASDAQ 100, internal weaknesses suggest a potential pullback in late September, a seasonally weak period. However, any decline is likely to be a normal correction (3-10%) rather than a major downturn.
Momentum indicators of the VIX such as the MACD and RSI are flat or neutral, offering little insight. The VIX-to-VVIX (volatility of volatility) ratio is declining, which is positive.
2. Other Sentiment Indicators:
The Ulcer Index is below its moving average, indicating low market fear.
The MOVE Index (bond volatility) shows a slight uptick but no major concern, yet.
The SKEW Index (out-of-the-money options) recently dropped from a high reading, suggesting no imminent large market move.
3. Market Ratios and Performance:
Large caps are outperforming small caps long-term, but small caps are gaining in a lower interest rate environment due to anticipated rate cuts in October and December.
Momentum stocks outperformed during the March-April 2025 downturn but are now range-bound relative to the S&P.
U.S. stocks are slightly outperforming global stocks, with emerging markets doing well compared to developed markets.
4. Advance-Decline Lines:
The S&P cumulative advance-decline line (volume-based) hit an all-time high, suggesting positive momentum despite price-based lines not confirming.
NYSE advance-decline lines are volatile but holding up, showing no significant weakness.
5. Technical Analysis:
The S&P is in a short & Intermediate-term uptrend, above 20- and 50-period moving averages, but extended from the 20-period average, hinting at a possible pullback to test support.
Intermediate and long-term trends remain positive, with multiple support levels (e.g., 50- and 100-period moving averages) if a decline occurs.
Bollinger Bands and Connor’s RSI show no extreme readings, indicating a stable uptrend.
6. Sector and Index Insights:
NASDAQ Composite (89.7) and NASDAQ 100 (86.7) lead technical scores, followed by Russell 2000 (81.2). The S&P 500 (75.2) and Dow (54.8) lag, with mid-caps weakest (49.9).
Growth (e.g., biotech, tech) is outperforming value (e.g., utilities, healthcare). Retail and discretionary sectors are solid but not outperforming the S&P.
Regional banks show improvement with a golden cross in their ratio to financials, but they remain range-bound.
7. Other Observations:
The S&P 500 is up 90.71% since October 2022, 62.4% since October 2023, and 37.87% since April 2025, reflecting a strong rally.
Negative divergences include the NYSE advance-decline line and Dow vs. transports.
Inflation and interest rate concerns are low, with cash-to-bond and TIPS-to-bond ratios range-bound or declining.
The German DAX is underperforming U.S. indices, and U.S.-German yield spreads correlate with the U.S. dollar index.
Takeaway: The S&P 500 remains broadly positive with strong technicals, but internal weaknesses and seasonal factors suggest a potential short-term pullback is possible. Support levels (20- and 50-period moving averages) will be key if a correction occurs. Most indicators point to a healthy market environment.

PDF of Slides: https://drive.google.com/file/d/1a0wMbolBsdaLuuxRLYvMxvZutlIXSks7/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!