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.

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.

Join Art Huprich, CMT, on Wednesday, August 27, 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, 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.

The DH Catastrophic Stop model declined to 72.7% from 77.27% last week. The decline stemmed from our breadth thrust composite turning neutral, as the initial bullish signal’s impact was programmed to diminish over time, consistent with historical patterns.  The model indicates that investors should maintain their benchmark equity exposure.

July was a telling month for global investors, as regional divergences in central bank policy and underlying economic momentum became increasingly impactful on relative currency moves. The U.S. dollar reached its trough on July 1, and the subsequent rally into the end of the month reduced international equity returns (in U.S. dollar terms).

July began with the index reaching record highs, bolstered by strong earnings expectations and optimism surrounding trade negotiations. However, caution emerged as market breadth and participation indicators diverged from price gains, hinting at the potential for increased volatility.

Watch the July 2025 Day Hagan Technical Analysis Webinar Replay as Art Huprich, CMT, delves into ongoing market trends, sentiment extremes, non-confirmations, and sector rotations amid overbought conditions and seasonal headwinds. Discover insights on global participation, commodities outlook, and Smart Sector.

The Day Hagan Catastrophic Stop model level is 77.27% as of today’s open, unchanged from last week. The model indicates that investors should maintain their benchmark equity exposure.

The S&P 500 closed over 6,300, yet New Highs contracted and A/D Lines are diverging—a condition, not a sell signal. Index-wise, a similar splintering exists. Until there is some resolve, define risk tolerance and implement an investment strategy with risk management parameters.

The Day Hagan Catastrophic Stop model level is 77.27% as of today’s open, unchanged from last week. The model indicates that investors should maintain their benchmark equity exposure.

The market remains overbought, with sentiment still relatively complacent, as I noted last week. When combined with proximity to resistance, the ingredients are still in place for a pause/pullback.

The Day Hagan Catastrophic Stop model remains unchanged at 77.27% from last week. The model indicates that investors should maintain their benchmark equity exposure.

Advance-Decline Lines are supportive. New Highs recently improved. Yet sentiment is ebullient (the Bulls are all in the pool—a condition, not yet a signal). Equity market proxies are short-term overbought (a condition), and some equity proxies are at or near resistance lines.

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.

Global equities performed well in June, driven by a confluence of dovish central bank policies, divergent economic releases, and gyrating trade dynamics in the U.S., China, the Eurozone, Canada, Japan, and the Pacific region.