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.

No change to our 30,000-foot view: Our models and indicators suggest an overall neutral outlook. Historically, equities have typically appreciated during periods of neutral market conditions. As a result, while we continue to anticipate a likelihood of short-term consolidation, we do not foresee a significant downturn on the near-term horizon.

Fixed income returns in September were driven by a potent intersection of monetary policy shifts, abundant supply, and evolving risk premiums across sectors. The net result was generally lower yields worldwide.

During September, global equity markets advanced on the back of dovish central bank shifts, resilient corporate earnings, and a rotation into regions beyond the U.S. In the U.S., the S&P 500 and Nasdaq recorded their strongest September gains in 15 years propelled by a fully priced-in 25 bp Fed cut and optimism for further easing.

September was an interesting month. Whether you were bullish or bearish, there was data to support your stance. For example, expectations of eventual Fed rate cuts, steadier corporate earnings, and resilient demand supported upside momentum.

Who knows better, Wall Street economists or the “collective we,” the stock market?

The DH Catastrophic Stop model level is 50%, indicating that investors should maintain their benchmark equity exposure. No change to our 30,000-foot view: Our models and indicators suggest an overall neutral outlook. Historically, equities have typically appreciated during periods of neutral market conditions.

Watch the September 2025 Day Hagan Technical Analysis Webinar Replay as Art Huprich, CMT, reviews supportive signals such as global participation, higher price peaks and troughs, sector rotation, and the Catastrophic Stop Loss model’s continued constructive stance. He also highlights headwinds, including A/D Line non-confirmations, overbought conditions, seasonal risks, and market sentiment extremes.

The DH Catastrophic Stop model level is 50%, indicating that investors should maintain their benchmark equity exposure. As we’ve noted over the past several weeks, our models and indicators suggest an overall neutral outlook.

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.

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.