InterMarket Analysis Update for Monday December 8, 2025

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Summary of the Intermarket Analysis Video Update prepared for Dec 8, 2025:
Overall Market Tone:
The S&P 500 has recovered well from the sharp pre-Thanksgiving sell-off and is now in a short- to intermediate-term uptrend, but the long-term weekly trend remains sideways/non-trending.
The market is still on “offense” in the big picture, but leadership is lacking → this is the main “yellow flag” (not red, just caution).
Key Event This Week:
Fed meeting widely expected to deliver a 25 bp rate cut. Market has fully priced it in after dovish comments from Fed officials overrode Powell’s earlier uncertainty.
Biggest Concern: Growth vs. Value Leadership:
Value stocks (defensive) are outperforming or holding up much better than growth stocks.
Growth has not reclaimed clear leadership since summer 2025; the key S&P Growth / Value ratio remains below its moving averages and in a multi-month downtrend.
Small-cap growth/value looks good, but mid-cap and large-cap growth/value ratios are weak.
This lack of growth leadership is the primary yellow flag — the market can still rise with value leading, but big moves higher normally require growth (especially the mega-caps) in the driver’s seat.
Valuation:
S&P remains very overvalued on almost every metric (trailing PE above 20, forward PE 22.4, CAPE 40.5, Mega-cap-8 forward PE 29.3).
Small- and mid-caps are closer to “fairly priced” (15–16× forward).
Earnings continue to justify high multiples for now; market keeps rewarding capital gains over valuation concerns.
Inflation Picture:
Market is NOT worried about inflation right now.
Some longer-term ratios (inflation/deflation monthly) flash mild warnings, CRB and Baltic Dry are drifting higher, but daily commodities are mostly choppy or down (oil, corn, wheat, lumber, fertilizer all in downtrends).
Inflation expectations (TIPS) remain tame.
Other Intermarket Highlights:
Mega-caps and big tech (Mag7/8, FANG, NDX100) are holding up but not showing strong outperformance lately.
Transports have surged the last two weeks → positive, potential early sign of broader participation.
Small caps bouncing but still underperforming the S&P in the bigger picture.
Semiconductors remain in an uptrend and are outperforming broader tech (encouraging).
Bonds: yields rising modestly into the Fed meeting; junk bonds and riskier credit still acting well.
Dollar: daily downtrend, weekly uptrend; struggling to stay above 100.
Gold & silver strong (gold best-performing asset YTD 2025), Bitcoin in a downtrend.
Breadth and advance-decline lines remain positive; equal-weight S&P close to all-time highs (shows broader participation than earlier in the bull).
Positive List (unchanged):
Transports surging, semis strong, junk bonds solid, copper in uptrend, emerging markets bouncing, broad indexes (Wilshire, NYSE Composite, etc.) near highs, etc.
Negative/Yellow-Flag List (also mostly unchanged):
Growth underperforming value (main concern)
Daily dollar downtrend, yen & pound weak vs. dollar, Bitcoin short-term downtrend, real estate and utilities rolling over.
Conclusion:
The S&P 500 is fine and still in a bullish big picture, but the lack of growth/mega-cap leadership and the shift toward value/defensive strength is a clear yellow flag. Needs to see growth reassert itself (especially the big stocks) to get convinced of the next strong leg higher. Until then, expect continued chop with a cautious/offensive bias and heavier use of market-neutral strategies.

PDF of Slides:
https://drive.google.com/file/d/1d4uvjIuNU6JuuokzQ20KIuJNK88VAGcx/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!