Daily Update Podcast for Tuesday September 23, 2025

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Market Summary for Monday, September 22, 2025:
Outlook for Tuesday, September 23, 2025:
Market Performance:
Major indices (S&P 500, Dow, NASDAQ, NASDAQ 100) hit new all-time highs with gains under 0.5% (S&P closed up 0.44%).
Market opened lower post-options expiration but quickly recovered, climbing above the daily pivot (6656) to R1 (6681) and R2, closing just below 6697, near the psychological 6700 level.
Volume was above average, likely due to options expiration squaring. No major economic reports were released.
Market Sentiment and Indicators:
Sentiment is positive but not exuberant, with some negative divergences (e.g., S&P 500 vs. VIX correlation above the dashed line, indicating potential overextension).
Short-term indicators (Stoch RSI, Williams %R, CCI, stochastics) show strong positive conviction, but the market is overextended relative to moving averages (11.49% above 200-day SMA, far from 20- and 50-day SMAs).
Intermediate-term indicators such as the RSI(14) and standard deviation charts show extreme positive readings, with the S&P nearing the upper end of the +3 channel.
Negative divergences persist: McClellan Oscillators (S&P and NYSE) are negative, and the summation index based on price is declining despite all-time highs. Volume-based indicators show some strength.
Growth outperformed value, driven by tech stocks including NVIDIA, Apple, and Oracle (up due to TikTok deal news). Defensive sectors including staples underperformed.
Valuation and Fundamentals:
The S&P 500 remains overvalued (S&P at 23x earnings, NASDAQ 100 at 29x), but forward earnings estimates for the S&P 500, NASDAQ, and Dow hit new highs, supporting price increases.
Quantitative easing continues to add liquidity, boosting equities. Corporate earnings are strong, and inflation concerns are minimal.
Other Markets:
Gold rose above $3,700, its best year since 1979, possibly as a hedge against uncertainty, despite a declining dollar. The 10-year yield was stable at 4.14%.
The dollar is in a downtrend, supporting stocks and gold. Oil is trending lower, in the low 60s.
Fed and Economic Context:
Fed speakers showed mixed views: St. Louis Fed’s Musalem sees policy as balanced, Atlanta’s Bostic supports one more rate cut in 2025, and Governor Moran advocates for a lower Fed funds rate.
Expected rate cuts in October and possibly December 2025, with more in 2026, are seen as supportive for stocks.
Tuesday’s economic reports include Global Manufacturing/Services PMIs, current account balance, and existing home sales (not major). Core PCE on Friday is a key inflation indicator.
Seasonality and Technicals:
September is historically weak, especially post-options expiration, but the market has defied this trend so far. Tuesday’s seasonality is also negative.
The 6700 level is a key resistance to watch. Support lies at the 20-period moving average or the 6468 level if a decline occurs.
Positive technicals include Heiken Ashi, Keiki, Ranko, and three-line break charts, but the bullish percent index lacks conviction, and financials continue to underperform the S&P 500.
Outlook:
The S&P 500 is positive across short, intermediate, and long-term timeframes but shows signs of overextension and internal weakness (e.g., negative divergences, underperforming small/mid-caps).
A potential pullback of 3-14% could occur without disrupting the broader uptrend, especially if sentiment becomes too exuberant or the 6700 resistance holds.
Key areas to watch: 6700 resistance, 20-period moving averages for support, and upcoming economic data, particularly core PCE on Friday.
Conclusion:
The S&P 500 continues its upward climb with new highs but lacks broad-based strength, raising caution about potential pullbacks. Investors should monitor resistance levels, sentiment gauges, and upcoming economic data for signs of a shift.