InterMarket Analysis Update for October 20-24, 2025

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The Intermarket Analysis video update, prepared for October 20, 2025, examines the S&P 500 valuation, sector performance, correlations, and other markets to assess broader market trends.
Key points include:
S&P 500 Valuation: Historically overvalued with a Shiller PE ratio of 39.79, significantly above the median of 16-17. Forward PE ratios show mega-cap stocks at 29.9, S&P 500 at 22.4, while mid-caps (15.9) and small-caps (15.3) are more fairly priced.
Growth vs. Value: Growth stocks continue to outperform value stocks across various indices and ETFs, though small-cap and mid-cap growth-to-value ratios show no significant breakout.
Inflation Indicators: Mixed signals—Martin Pring’s inflation-to-deflation ratio suggests inflationary pressure, but other indicators like the CRB index, corn, wheat, and lumber are neutral or deflationary. Aluminum and copper are in uptrends, while oil and natural gas are trending lower.
Currency and Gold: A bearish cross (death cross) occurred in the Japanese yen to U.S. dollar, signaling yen weakness. The U.S. dollar index is in a downtrend, benefiting stocks. Gold and silver hit all-time highs, with silver outperforming gold.
Sectors: Tech and utilities are strong, with tech outperforming the S&P 500. Financials, industrials, and energy underperform, while healthcare shows signs of a defensive shift with a recent golden cross.
Other Markets: Bonds are in a flight-to-safety uptrend, with corporate and junk bonds holding above moving averages. The Nikkei is near all-time highs, Bitcoin is testing its 200-day moving average, and semiconductors remain strong but not at recent highs.
Correlations and Trends: Stocks and the 10-year yield show a strong positive correlation. The S&P 500 advance-decline line is positive, but other indices lag. Dow Theory shows mixed signals, with utilities outperforming but transports lagging.
Positives and Negatives: Most indicators remain positive, except for the U.S. dollar index and the yen-to-dollar ratio, which are now negative due to the recent death cross.
The markets are navigating concerns like the government shutdown, trade war tensions, and a shift toward defensive sectors, but positive earnings and tech strength maintain an overall bullish outlook.

PDF of Slides:
https://drive.google.com/file/d/1NRzC-ieCyc0hKJglicWwOC_l09aKh-22/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!