Signs of near-term overbought conditions and slowing momentum are evident as investors await more clarity from the Federal Reserve. However, our longer-term models and indicators remain supportive.

The DH Catastrophic Stop model level is 50%, indicating that investors should maintain their benchmark equity exposure. Our models and indicators suggest an overall neutral outlook. Historically, equities have typically appreciated during such neutral periods, as indicated by our models.

While the equity market will always be dealing with near-term worries, the majority of our models and indicators remain supportive. This implies that the odds currently favor equities remaining stable or moving higher in Q4.

The DH Catastrophic Stop model level is 50%, indicating that investors should maintain their benchmark equity exposure.

The DH Smart Value Portfolio continues to invest in companies producing excess returns through positive economic profitability, supported by solid balance sheets (quality), significant cash generation (profitability), and trading with considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

August was shaped by two global forces: new U.S. tariffs and shifting investor flows. The tariff package altered trade expectations and corporate guidance across supply-chain-heavy sectors. Flows swung through the month—early equity outflows on tariff headlines, a mid-month rebound as softer U.S. data hinted that tightening cycles were near an end.

In August, sector narratives were shaped by tariffs, macroeconomic indicators, earnings revisions, and interest rate developments. Overall, the tariff landscape tightened as several actions taken earlier in the summer resulted in a higher effective tariff burden by early August.

Join us for an informative webinar where we explore smart investing strategies, balanced portfolios, and risk management techniques to enhance your portfolio process. Whether you're a seasoned financial advisor or an individual investor, this webinar will provide valuable insights and practical knowledge to optimize your investment approach.

Join Art Huprich, CMT, on Wednesday, September 24, 2025, at 4:00 PM ET, for the monthly Day Hagan Technical Analysis. Art will be discussing the current technical condition of the equity markets (domestic, international, and emerging) based on supply (selling pressure) and demand (buying interest) analysis.

Last week, I discussed short-term headwinds for equities, which are now evident in several factors: overbought conditions, fading systematic flows, all-in CTA positioning, corporate buybacks in a dry spell, and seasonal issues for equities and the Volatility Index (VIX).

The DH Catastrophic Stop model declined to 59.09% from 72.7% last week. The model indicates that investors should maintain their benchmark equity exposure.

Our perspective has remained relatively unchanged over the last three weeks: The excessive optimism noted four weeks ago has slightly moderated, and we have been anticipating a consolidation phase as sentiment and technical indicators trended toward more normalized levels.

Watch the August 2025 Day Hagan Technical Analysis Webinar Replay as Art Huprich, CMT® delves into current market trends, highlighting supportive factors like global participation and bullish thrusts while addressing headwinds such as seasonal volatility and non-confirmations.

The DH Catastrophic Stop model level is 50.0%, unchanged from last week. The model indicates that investors should maintain their benchmark equity exposure. Our perspective also remains largely unchanged from last week.

Small caps broke out and pulled back—false breakout? Maybe, though I believe a small-cap (and DJIA) breakout will eventually stick. Sector rotation (Health Care led last week)? Until we get an answer, bullish price trends are in control. For the Bears, it remains “show me.”  

The DH Catastrophic Stop model declined to 50.0% from 59.09% last week. The model indicates that investors should maintain their benchmark equity exposure.

The S&P 500 cut through resistance like a hot knife through butter, closing at a new high. Index Movers and Small Caps participated. Yet, domestic A/D Lines recorded a second non-confirmation (Figure 1), and New High readings, though not a good timing tool, reflect a diverging backdrop.

Last week, Wall Street experienced a triple blow: a negative “Outside Reversal Day,” above-average volume “Exhaustion,” and hard downside selling. As a result, the Large Cap Growth indices registered a short-term price peak, finally establishing a level of resistance.