The Safe Investing Blog

Stock Market Outlook entering the Week of October 19th = Uptrend

• Average Directional Index: Downtrend
• 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 1.7% last week.  The index sits less than 2% above the 50-day moving average and ~10% above the 200-day moving average.

No change in the indicators from last week.  The index added another distribution day, bringing the total 4; 5 or more is considered elevated.

SPX Price & Volume Chart for Oct 19 2025

PERFORMANCE COMPARISONS
Real Estate ( $XLRE ) led sectors higher, while Financials ( $XLF ) underperformed; more on that sector in the commentary.  Communications, Consumer Discretionary, and Real Estate ( $XLC, $XLY, $XLRE ) recovered to Bullish bias; Industrials ( $XLI ) eased back to Neutral.

S&P Sector Performance from Week 42 of 2025

Reversing from the prior week, all sector styles registered a gain; High Beta ( $SPHB ) outperformed, Low Beta underperformed ( $SPLV ).  Mega Cap Growth and Large Cap Value ( $OEF, $IWX, $POWA ) moved to Bullish bias;  Mid Cap Growth and Value,  ( $IJH, $IJJ ) eased back to Neutral bias.

Sector Style Performance from Week 42 of 2025

Gold outperformed all assets last week, despite the dip on Friday.  Bitcoin ( $IBIT ) sold off again, and fell to Bearish bias.  The U.S. Dollar moved back to Neutral bias.

Asset Class Performance from Week 42 2025

COMMENTARY
Price and volume didn’t give many clues to the markets next move.  The S&P500 spent the week consolidating the October 10th sell-off; no quick recovery, but no further sell-off.  Volatility ( $VIX ) eased towards 20 on Friday, but made higher lows all week.  The U.S. dollar faded towards oversold, but remains bullish.

Fraud allegations led to a sell off across the banking sector, on fears of broader commercial credit risks.  Two regional banks revealed multi-million dollar losses tied to suspected loan fraud by borrowers.  These disclosures follow bankruptcies by an auto parts supplier ( First Brands ) and car dealership ( Tricolor ), after these two borrowers engaging in off-balance-sheet debt and subprime loans to undocumented and no credit borrowers, respectively.  Despite the boilerplate responses ( financial system is sound, credit quality is strong ), keep an eye out for more “cockroaches”, as Jamie Dimon put it.

With Gold up 25% since turning bullish, and last week’s move looking a bit parabolic, taking some profit is a good idea.  The same goes for other sectors and styles with returns in the double digits (*cough* High Beta *cough*).

This week September CPI will be released, despite the government shutdown, since the Social Security Administration needs third-quarter CPI data for annual cost-of-living adjustments.

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 October 12th = Uptrend

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

ANALYSIS
The stock market outlook continues to show an uptrend for U.S. equities, despite Friday’s meltdown.

The S&P500 ( $SPX ) fell 2.4% last week, with all the damage occurring during Friday’s session.  The index sits less than 1% above the 50-day moving average and ~8% above the 200-day moving average.

The ADX indicator flipped to bearish; not a surprise given Friday’s move.  In addition to Friday’s distribution day, there was a stalling day on October 3rd missed in the last update, bringing the total count to 3.

SPX Price & Volume Chart for Oct 12 2025

PERFORMANCE COMPARISONS
Utilities ( $XLU ) escaped the week with a gain, Consumer Staples basically broke even.  Otherwise a lot of losses, led lower by Energy ( $XLE ).   Consumer Discretionary, Energy, Financials, Industrials, Materials, and Real Estate ( $XLY, $XLE, $XLF, $XLI, $XLB, $XLRE ) all dropped to Bearish bias, and Communications ( $XLC ) fell to Neutral.

S&P Sector Performance from Week 41 of 2025

All sector styles registered a loss lasts week; Low Beta ( $SPLV ) was the least “bad” and Mid Cap Value ( $IJJ ) was the worst.  Low Beta, Mid Cap Growth and Value, High Dividend and Defensive ( $SPLV, $OJH, $IJJ, $SPHD, $POWA ) all moved to Bearish Bias; Mega Cap Growth and Large Cap Value ( $OEF, $IWX ) moved to neutral.

Sector Style Performance from Week 41 of 2025

Bitcoin ( $IBIT ) led Oil and U.S. equities lower, while Gold outperformed to the upside.  Bitcoin also moved to Neutral bias, while the U.S. Dollar moved to bullish.

Asset Class Performance from Week 41 2025

COMMENTARY
Friday’s trading session was a reminder that substantial geopolitical risks remain in play, even if the market has largely ignored them since April.  The massive sell-off was sparked by a social media post from President Trump at 10:57 a.m., lamenting China’s recent stance on sourcing rare earth metals and potential response options.

The volatility was especially bad for crypto markets, resulting in forced liquidations and other “emergency” measures.  The level of wealth destruction is a sobering reminder that crypto remains a highly leveraged, highly speculative, low liquidity asset class, despite making inroads into institutional portfolios and fund offerings.

The silver lining was a lack of by institutional selling, seen in the indexes, leading up to Friday’s meltdown.  Now we need to see how institutions respond; was this a one time event that’s recovered quickly, or the start of repricing for a higher risk environment.  Watch volatility ( $VIX ) for the next few days; it spiked into the 20’s on Friday and needs to retreat quickly to avoid altering capital flows.

U.S. equity sectors and styles flirted with bias changes over the past few weeks, so the fact that Friday’s sell-off pushed many into bearish territory isn’t too surprising.  Recent outperformance by Utilities and Healthcare is a bit more interesting, as those sectors typically lead when growth and inflation are slowing.

Keep an eye on the U.S. dollar as well. It’s moved to bullish bias now, and may have completed its own bottoming process in mid-September, which would also contribute to weaker returned for equities, from a historical perspective.

Monday’s session is also a bit of an unknown, as equity markets are open despite a bank holiday here in the U.S.  Any residual liquidity issues created Friday, or new ones created Monday, may not be rectified until Tuesday. It’s possible volatility could drag on into the middle of next week.

Federal Reserve officials were already planning to work overtime next week, slated for a total of 18 speaking engagements!  September PPI was on the schedule, but we won’t see those numbers unless the government shutdown ends.

And in the background of all this market “drama” is the start of earnings season, with major investment banks kicking things off on Tuesday!

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 October 5th = 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 1.1% last week.  The index sits ~3% above the 50-day moving average and ~11% above the 200-day moving average.

All three indicators are bullish.

SPX Price & Volume Chart for Oct 05 2025

PERFORMANCE COMPARISONS
Healthcare ( $XLV ) was up ~7% last week(!), besting all other sectors by a wide margin.  After it’s recent run up, Energy ( $XLE ) lost some of it’s momentum, thanks in part to Crude Oil, and registered the weakest returns.  Healtcare and Real Estate ( $XLRE ) improved to Bullish bias, while Materials ( $XLB ) slipped to neutral.

S&P Sector Performance from Week 40 of 2025

High Beta ( $SPHB ) outperformed last week, with Small Cap Growth and Quality ( $IWO & $QUAL ) right behind.  Momentum ( $MTUM ) was the only losing style.  High Dividend ( $SPHD ) moved back to bullish bias from neutral.

Sector Style Performance from Week 40 of 2025

Bitcoin ( $IBIT ) got its mojo back, jumping ~13%, and reclaimed bullish bias.  On the other hand, Oil ( $USO ) dropped ~7% last week and returned to bearish bias…just one week after popping ~5% moving to bullish.

Asset Class Performance from Week 40 2025

COMMENTARY
Last week’s data releases showed August job openings ( JOLTs ) increased slightly.  The ISM Manufacturing survey show a small improvement as well, while services were a bit lower.  The main course, Non-Farm Payrolls, wasn’t released due to the U.S. government shutdown, so other tea leaves need reading prior to the next FOMC meeting.

While there’s been a lot of noise about interest rates and unemployment, the general indexes continue to march higher.  Even a bit of volatility below the surface of the market (in terms of sectors and styles) hasn’t done much to slow it’s advance.

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 28th = 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 ) fell 0.3% last week.  The index sits ~3% above the 50-day moving average and ~11% above the 200-day moving average.

All three indicators remain bullish.

SPX Price & Volume Chart for Sept 28 2025

PERFORMANCE COMPARISONS
Energy ( $XLE ) outperformed last week, and it was Materials turn ( $XLB ) to lead on the downside.  Adding insult to injury, Materials also fell into bearish bias; Healthcare fell to neutral.

S&P Sector Performance from Week 39 of 2025

Low Beta ( $SPLV ) outperformed last week with a gain of 0.8%!  All other sector styles struggled, with High Beta ( $SPHB ) down the most.  Low beta climbed up to neutral bias, while High Dividend ( $SPHD ) stumbled down to neutral.

Sector Style Performance from Week 39 of 2025

Oil ( $USO ) jumped almost 5% last week, while Bitcoin ( $IBIT ) underperformed again.  Those two assets also flipped their biases; Oil to bullish and Bitcoin to bearish.  The dollar showed signs of life last week; something to keep an eye on as a strengthening dollar will impact asset prices.

Asset Class Performance from Week 39 2025

COMMENTARY
U.S. equity indexes came into the week overbought, so last week’s downside volatility wasn’t too surprising.  Market participants quickly bought the dip, with the $SPX finding support at the 21-day moving average.

The third and final update for Q2 GDP came in at +3.8%, a full 50 basis points higher than the second estimate, thanks increases in consumption.

August PCE data was inline with estimates and remains “sticky”.

This week is employment data (JOLTS, NFP), and ISM data. And there’s the possible shutdown of the U.S. government, unless Congress can pass the necessary appropriations bills to keep federal agencies funded…which seems unlikely.

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 21st = 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 1.2%.  The index sits ~4% above the 50-day moving average and ~11% above the 200-day moving average.

We made it through another week without institutional selling, meaning all three indicators are bullish once again.

SPX Price & Volume Chart for Sept 21 2025

PERFORMANCE COMPARISONS
The Technology sector ( $XLK ) outperformed again last week, while Consumer Staples ( $XLP ) was the worst sector again, along with Real Estate ( $XLRE ).  Real Estate also fell back to neutral bias.

S&P Sector Performance from Week 38 of 2025

High Beta ( $SPHB ) outperformed last week, and Low Beta ( $SPLV ) underperformed and fell to bearish bias.

Sector Style Performance from Week 38 of 2025

Gold ( $GLD ) edged past U.S. equities last week to lead asset class returns, while Bitcoin ( $IBIT ) underperformed.  There were no changes in bias.

Asset Class Performance from Week 38 2025

COMMENTARY
In a move that surprised no one, the FOMC cut rates 0.25% in response to weakening labor data.  Market participants were more interested in the future rate path; how much more easing there will be.  And on that front, messages out of the Fed were mixed.  It’s likely we’ll need to see further deterioration in the labor market, and/or reduced inflationary pressure before more cuts are in play.

Fed Chair Powell gets another chance to discuss the plan ( or not ) during a speech on Tuesday.  We’ll also Flash PMI just after market open, so expect volatility until the early afternoon.  We’ll also get the final GDP update for Q2 at 8:30am Wednesday, followed by August PCE at 8:30am on Friday.

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 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