The Safe Investing Blog

Stock Market Outlook entering the Week of September 14th = Uptrend

• Average Directional Index: Uptrend
• Institutional Activity: Neutral
• On-Balance Volume: Uptrend

ANALYSIS
The stock market outlook continues to show an uptrend for U.S. equities.

The S&P500 ( $SPX ) rose 1.6%.  The index sits ~3% above the 50-day moving average and ~10% above the 200-day moving average.

We made it through the week without any institutional selling, and two distribution days fell off the count,  so the total sits at 5; still high, but not as worrisome.  Otherwise, the indicators remain bullish.

SPX Price & Volume Chart for Sept 14 2025

PERFORMANCE COMPARISONS
The Technology sector ( $XLC ) outperformed last week, while Consumer Staples ( $XLP ) was the worst sector.  Consumer Staples ( $XLP ) “unimproved” from last week’s improvement, dropping back to Bearish bias, while Utilities ( $XLU ) returned to bullish.

S&P Sector Performance from Week 37 of 2025

The Momentum style ( $MTUM ) beat all comers last week, while Mid-Cap Value  ( $IJJ ) underperformed.

Sector Style Performance from Week 37 of 2025

Bitcoin ( $IBIT ) returned got back in the win column last week, and returned to bullish bias.  The U.S. dollar ( $DXY ) underperformed.

Asset Class Performance from Week 37 2025

COMMENTARY
The NFP annual revision lowered 2024 jobs data by 911,000 jobs, exceeding the expected 818,000 revision.  It was the large revision in over 20 years, and suggests the labor market has been weaker than previously thought.  The revision gives the FOMC the needed rationale to begin cutting interest rates, although it also increases the political pressure to do more.

Inflation data was mixed, with producer prices rising more slowly than consumer prices.  Headline and Core PPI showed a decline in prices during August, even after downward revisions to July figures.

Headline CPI showed modest increases in headline data, while core remained flat at 3.1%.

We’ve got the FOMC rate decision on Wednesday this week, with many expecting a rate cut given weaker employment data (the bond market included).  Chairman Powell “pivoted” from inflation to labor last year, so not cutting would be more surprising at this point.

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security

Stock Market Outlook entering the Week of September 7th = Uptrend

• Average Directional Index: Uptrend
• Institutional Activity: Neutral
• On-Balance Volume: Uptrend

ANALYSIS
The stock market outlook continues to show an uptrend for U.S. equities, despite last week’s weak labor data.

The S&P500 ( $SPX ) rose 0.3%.  The index sits ~2% above the 50-day moving average and ~9% above the 200-day moving average.

The ADX Directional Indicators briefly crossed over after the holiday weekend, but immediately reversed back to bullish; not surprising given the main reading is approaching 20.  Three distribution days fell off the count, but two were added, so the total remains at seven (>5 = high). Price remains above key moving averages, so the signal stays at neutral.

SPX Price & Volume Chart for Sept 07 2025

PERFORMANCE COMPARISONS
Communications ( $XLC ) outperformed last week, while Energy ( $XLE ) gave back some recent gains.  Consumer Staples ( $XLP ) improved from Bearish to Bullish after last week’s drop, and Utilities ( $XLE ) fell is testing its bias level.

S&P Sector Performance from Week 36 of 2025

Small cap value ( $IWN ) outperformed all other styles for a fourth week in a row; High Beta ( $SPHB) underperformed.  Low Beta ( $SPLV ) is testing a bias level, moving from bullish the neutral.

Sector Style Performance from Week 36 of 2025

Gold ( $GLD ) led assets to the upside for a second week, while Oil ( $USO ) was the worst performer.  No changes in bias to start the week.

Asset Class Performance from Week 36 2025

COMMENTARY
ISM Services and Manufacturing PMI were higher in August, though Manufacturing remains contractionary.

JOLTs ( July ) and Non-farm payrolls ( August ) show some weakness in the labor market, with both datasets coming in lower than expected.  Given the recent back and forth about the validity of U.S. government statistics, it’s hard to get too excited about the numbers.  That said, markets reacted as though the Federal Reserve got the green light to cut interest rates this month.

This Tuesday, the annual revision of NFP data is released, with expectations for a decrease of 818k jobs, likely increasing the pressure to ease.  Then August PPI and CPI will hit the wires.  Expect some volatile opening moves this week!

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security

Stock Market Outlook entering the Week of August 31st = Uptrend

• Average Directional Index: Uptrend
• Institutional Activity: Neutral
• On-Balance Volume: Uptrend

ANALYSIS
The stock market outlook continues to show an uptrend for U.S. equities.

The S&P500 ( $SPX ) fell 0.1%.  The index sits ~2% above the 50-day moving average and ~8% above the 200-day moving average.

SPX Price & Volume Chart for Aug 31 2025

On-balance is back in bullish territory, but also shows a bearish divergence since the end of July.  The ADX has also faded over that period of time, suggesting the current rally is losing some steam.  The market got a reprieve from institutional selling last week, and distribution days will start falling off the count through the week.

PERFORMANCE COMPARISONS
Energy ( $XLE ) led sectors higher again last week; Utilities and Consumer Staples ( $XLU & $XLP ) were the worst performers.  Staples also dropped to bearish bias.

S&P Sector Performance from Week 35 of 2025

Small cap value ( $IWN ) outperformed for a third week, but the overall gains were small.  Low Beta ( $SPLV ) was the laggard.  No changes in bias; all styles are bullish.

Sector Style Performance from Week 35 of 2025

Gold ( $GLD ) led assets to the upside, while Bitcoin ( $IBIT ) was the worst performer for the second week in a row.  Adding insult to injury, Bitcoin ( $IBIT ) starts September with a bearish bias.  The US Dollar ( $DXY ) is back to neutral.

Asset Class Performance from Week 35 2025

COMMENTARY
Nvidia ($NVDA) reported better than expected results last week, but the stock price took a small hit because analysts were expecting higher data center revenues ($41.1b vs $41.3b).  Guidance for next quarter was also lower than expected, largely because they’re not including sales to China.  Since the stock accounts for 8% of the S&P500, it’s price has an oversized impact on the index.

The second estimate of Q2 GDP came in higher than the first, from 3% to 3.3%, mainly due to upward revisions to investments and consumer spending data.

Headline PCE  data for July was inline with estimates, while Core was slightly higher.  For the first time in many months, there were no revisions to prior data!

This week, U.S. markets are closed on Monday for Labor Day.  Later in the week, we’ll get the latest PMI data, as well as JOLTs and NFP.

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of August 24th = Uptrend

• Average Directional Index: Uptrend
• Institutional Activity: Neutral
• On-Balance Volume: Neutral

ANALYSIS
The stock market outlook continues to show an uptrend for U.S. equities, though institutional selling increased again.

The S&P500 ( $SPX ) rose 0.3%.  The index sits ~3% above the 50-day moving average and ~9% above the 200-day moving average.

The market encountered more distribution days last week, bringing the total to 7.  Price remains above the 50-day, and bounced on Friday, so the signal remains neutral for now.  On-balance volume also eased the past few weeks and is now resting on its moving average.

SPX Price & Volume Chart for Aug 24 2025

PERFORMANCE COMPARISONS
Energy ( $XLE ) led sectors higher, while Technology was underperformed ( $XLK ).  Energy and Real Estate ( $XLE & $XLRE ) regained bullish bias.

S&P Sector Performance from Week 34 of 2025

Small cap value ( $IWN ) outperformed for a second straight week, while Large Cap Growth was the laggard ( $OEF ).  No changes in bias; all styles are bullish.

Sector Style Performance from Week 34 of 2025

Oil ( $USO ) led assets higher and Bitcoin ( $IBIT ) underperformed.  Gold ( $GLD ) is back to bullish bias after some recent weakness.

Asset Class Performance from Week 34 2025

COMMENTARY
After 4 straight days of selling in U.S. equity indexes, Federal Reserve Chairman Powell came to the rescue on Friday.  During his remarks from Jackson Hole, signaled a potential shift in the interest rate discussion. In particular, most people focused on the following statement:

“…with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy
stance.”

Those words were interpreted as an interest rate cut is coming in September.  Some are going further, using what Powell didn’t say as an indicator the Fed has stopped pursuing the 2% inflation target as a near-term goal, and will focus policy on labor and economic growth.  Time will tell.  Prior to the next FOMC meeting, there’s another round of inflation data ( PCE, CPI, and PPI ), as well as the August non-farm payrolls data.

If/when rates are lowered, expect to see a reduction in your short-term interest payments ( savings accounts, interest-bearing checking accounts, money markets, short-term bonds, etc. ).

A quick note about the signals presented above, specifically the institutional selling.  Given the relative weighting of technology stocks ( e.g. Mag 7 ), the index can suffer from market-cap distortions, where downside moves are caused by just a few stocks.  This can make the overall market drop, while a majority of tickers are breakeven or higher.

The tables above show that Technology/Communications sectors and Mega/Large Cap growth styles underperformed last week, and likely drove a lot of the action at an index level.  Recent underperformers and/or bias tests have bounced back as well, meaning the the high volume likely reflects end of summer asset reallocation, rather than outright selling of equities ( which we’ve discussed over the past few weeks as a wise move for your holdings as well ).

This week, we get an updated Q2 GDP figure Thursday and the aforementioned PCE reading for July on Friday. All of which could be overshadowed by Nvidia earnings Wednesday after market close.

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of August 17th = Uptrend

• Average Directional Index: Uptrend
• Institutional Activity: Neutral
• On-Balance Volume: Uptrend

ANALYSIS
The stock market outlook continues to show an uptrend for U.S. equities, though institutional selling increased again.

The S&P500 ( $SPX ) rose 0.9%.  The index sits ~4% above the 50-day moving average and ~9% above the 200-day moving average.

The market added 2 more distribution days last week, bringing the total to 6 (which is elevated) and dropping the Institutional Activity signal to neutral.

SPX Price & Volume Chart for Aug 17 2025

PERFORMANCE COMPARISONS
Health care ( $XLV ) led sectors higher, while Utilities and Consumer Staples ( $XLU & $XLP ) underperformed.  Materials and Healthcare ( $XLB & $XLV ) regained bullish bias and Energy ( $XLE ) rose to neutral.

S&P Sector Performance from Week 33 of 2025

Small cap value ( $IWN ) outperformed the other styles, while Momentum and Low Beta ( $MTUM & $SPLV ) came away with small losses.

Sector Style Performance from Week 33 of 2025

Despite a choppy week, U.S. equities led assets higher, and Gold ( $GLD ) underperformed.  Gold is also testing bias levels, while the U.S. dollar fell back to bearish bias.

Asset Class Performance from Week 33 2025

COMMENTARY
Last week’s inflation data surprised too the upside; not good for those with hopes of large interest rate cuts.

Headline CPI was the “best” reading, showing now change in year over year readings.  Core CPI increased in July, and that’s on top of an upward revision to June data ( from 2.8% to 2.9% ).

Headline and Core PPI showed sharper increases in inflation readings.  The headline data increased to 3.3%, on top of an upward revision to June data ( from 2.3% to 2.4% ).  Core was the worst, jumping more 1%.

Retail sales showed an increase of 3.9% year over year, down from June;s 4.4%.

And finally, the University of Michigan consumer sentiment survey dropped to 58.6, well below market expectations of 62, due to inflation concerns and higher prices for durable goods ( e.g. furniture, appliances, etc. ).

Data releases this week relate to housing, though all eyes and ears will be on Jackson Hole, Wyoming, for the U.S. Federal Reserve’s annual symposium. Specifically, talking heads will try to assess any changes in the “tone” of Chair Powell’s speech on Friday.

The increase in institutional selling activity ( noted above ) coincides with other traditional technical measures showing an overbought market with bearish divergences developing (e.g. MACD, RSI, etc.).  While it’s not time to panic, it is time to harvest some of those summer gains.

Asset class and sector bias has been volatile as of late, which aligns with the historical trend for August.  Not quite outright rotation, but there was definitely some flow shifts behind the scenes.  With seasonally weak September right around the corner, take a look at those allocations and make sure they still make sense.  Consider adding to positions that are still bullish bias, but oversold.

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of August 10th = Uptrend

• Average Directional Index: Uptrend
• Institutional Activity: Uptrend
• On Balance Volume: Uptrend

ANALYSIS
The stock market outlook continues to show an uptrend for U.S. equities.

The S&P500 ( $SPX ) rose 2.4%.  The index sits ~3% above the 50-day moving average and ~8% above the 200-day moving average.

The ADX directional indicator rejoins Institutional Activity and On-Balance Volume in bullish territory.  Distribution days ticked up heading into August; something to keep an eye.

SPX Price & Volume Chart for Aug 10 2025

PERFORMANCE COMPARISONS
Consumer Discretionary ( $XLU ) led sectors higher, while Energy and Healthcare ( $XLE & $XLV ) underperformed.  Discretionary, Staples, and Financials ( $XLY, $XLP, $XLF ) returned to bullish bias; Materials ( $XLB ) eased back to Neutral and Energy ( $XLE )  fell to bearish.

S&P Sector Performance from Week 32 of 2025

All sector styles gained last week; Mega Cap Growth ( $OEF ) led the charge and High Beta ( $SPHB ) brought up the rear.  Last weeks laggards ( $SPLV, $IWN, $IJJ, $IWX, $SPHD ) all regained bullish bias.

Sector Style Performance from Week 32 of 2025

In a reversal from the prior week, Oil ( $USO ) underperformed other assets and Bitcoin ( $IBIT ) outperformed. Oil also fell back to bearish bias.

Asset Class Performance from Week 32 2025

COMMENTARY
Earning season is winding down and a majority of companies (>80%) beat their Q2 earnings estimates.  Most estimates were lowered in anticipation of tariffs, which were largely delayed until earlier month, so that feat is slightly less impressive than it first appears. The full impact of new tariffs likely hits Q4 earnings data. Year over year earnings growth in quarterly earnings is still positive though, which is good.

ISM Services PMI dropped to 50.1 in July, down from June’s from 50.8 in June and below forecasts of 51.5. Within that data, the Services Prices Index rose to 69.9, the highest since October 2022. For reference, this sub-index measures the prices that service businesses are paying for inputs (e.g. materials and services), and is a key indicator of inflationary pressures in the services sector.

This week we get the latest CPI and PPI inflation data, along with retail sales and consumer sentiment.

Elsewhere, President Trump signed an executive order to expand Americans’ access to alternative investments in their 401(k) retirement plans (cryptocurrency, private equity, and real estate). While a lot of ink was spilled about the impact on financial markets, keep in mind this is the federal government we’re talking about, so changes could take years.

First, the SEC, U.S. Treasury, and Department of Labor need to rewrite the regulations that define what qualifies as a permissible 401(k) asset. Then 401k providers must provide new investment options within those rules.  And then employers add those options to their 401k plans.

Despite the bounce back by several sectors and styles, August is a seasonally weak period for U.S. equities, and another reason we raised some caution flags last week.  Since 1990, this time period has the highest rate of change in volatility, and the second worst monthly returns.  The worst monthly returns?  September.  So don’t be surprised if prices continue to chop around.  Take an extra moment to review your stop levels, max loss amounts, and profit targets for any new and/or existing positions.

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of August 3rd = Uptrend

• Average Directional Index: Neutral
• Institutional Activity: Uptrend
• On Balance Volume: Uptrend

ANALYSIS
The stock market outlook remains in an uptrend for U.S. equities, although high volume selling and bearish bias shifts are cautionary signs.

The S&P500 ( $SPX ) fell 2.4%.  The index sits ~2% above the 50-day moving average and ~6% above the 200-day moving average.

The ADX directional indicators are on the verge of a cross-over (i.e neutral), but the other two signals remain bullish entering the week.

SPX Price & Volume Chart for Aug 03 2025

PERFORMANCE COMPARISONS
The Utilities sector ( $XLU ) was the only gainer last week; Materials ( $XLB ) led to the downside. Consumer Discretionary, Energy, and Financials ( $XLY, $XLE, $XLF ) downshifted to neutral bias, while Staples, Healthcare, Materials, and Real Estate ( $XLP, $XLV, $XLB, $XLRE ) all dropped to bearish.

S&P Sector Performance from Week 31 of 2025

All sector styles were lower last week; Momentum ( $MTUM ) escaped with the least damage, while Small Cap Value ( $IWN )  was hardest hit.  Low Beta, Small/Mid/Large Cap Value, and High Dividend ( $SPLV, $IWN, $IJJ, $IWX, $SPHD ) fell to neutral bias.

Sector Style Performance from Week 31 of 2025

Oil ( $USO ) outperformed other assets and Bitcoin ( $IBIT ) underperformed. Oil, gold, and bonds ( $USO, $GLD, $IEF ) all returned to bullish bias, and the U.S. dollar ( $DXY )  improved to neutral.

Asset Class Performance from Week 31 2025

COMMENTARY
U.S. equities weren’t a fan of the macro data dump.  June job openings (JOLTs) fell slightly and missed expectations, but not by much.  The first Q2 GDP estimate came in at 3%, which is unchanged year over year, but above expectations and significantly better than last quarter’s read.

So it’s not all that surprising the FOMC held rates steady, citing a low unemployment rate, somewhat elevated inflation, and persistent uncertainty about the economic outlook (i.e. impact of tariffs).

The subsequent PCE data release showed inflation rising in June (on a year over year basis), and that’s after an upward adjustment of 0.2% to May’s Headline and Core figures.

We continue to see a pattern of prior core and headline PCE data revised higher the following month…not enough to influence policy, but certainly enough to start asking questions.

Enter July Non-Farm Payrolls.  Friday’s NFP data showed an increase of 73,000 jobs in July, well below expectations of 110,000. Not great, but not awful either. The report also revised June and July figures as well:

• June payroll data was lowered from 147K to 14K ( -90% )
• May payroll data was lowered from 144k to 19k ( -87% )

Those are massive revisions, and points out a weaker labor market than the one used to set policy.  Granted, NFP is just a directionally correct estimate, derived from small surveys and models each month.  But even the higher accuracy, lower speed data (Quarterly Census of Employment and Wages or QCEW) shows a growing rift with NFP estimates, which all suggests that even “directionally correct” may be a stretch.

So what’s a safe investor supposed to do?  Watch asset prices and use fundamental/macro data as confirmation.  The breakout in bonds (i.e. rates down) and the U.S. dollar is a deflationary signal, but equity indexes are still bullish.

In the meantime, when sectors, styles, or asset classes downshift into bearish bias, it’s time to adjust their respective position sizes.  At the very least, dropping the position to your minimum size is warranted, while exiting the position all together is a safer play, especially if the ticker covered by more than one category (e.g. $XLP and $SPLV).

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.