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

In October, global bond markets experienced modest yield declines, though total returns were uneven across regions. The Bloomberg Global Aggregate Bond Index fell roughly 0.3% as elevated global issuance and stretched valuations weighed on returns.

Global equity markets in October reflected a mix of optimism and caution. Strong corporate earnings, particularly in the technology sector, and expectations of monetary easing improved investor sentiment. Equity funds experienced significant inflows in early October, the highest in nearly a year, as weaker U.S. inflation and a disappointing jobs report raised hopes for Federal Reserve rate cuts.

November was a telling month. For the bullish camp: the Federal Reserve cut rates in late October and reaffirmed its easing intentions, which helped risk assets; corporate earnings remained resilient across many sectors; and, despite uncertainty, the economy still showed durability.

The Day Hagan Catastrophic Stop model closed at 50% on Friday. The model continues to indicate that investors should maintain their benchmark equity exposure. The model uses a systematic, weight-of-the-evidence approach combining price, valuation, economic trends, monetary liquidity, and sentiment indicators to identify periods of heightened market risk.

The Day Hagan Catastrophic Stop model closed at 50% on Friday. The model continues to indicate that investors should maintain their benchmark equity exposure. Several factors continue to underpin a constructive equity outlook.

The Day Hagan Catastrophic Stop model closed at 50% on Friday. The model continues to indicate that investors should maintain their benchmark equity exposure. Several factors continue to underpin our constructive view on equities. Corporate earnings have remained robust, with results generally exceeding expectations and forward guidance holding up well.

The Day Hagan Catastrophic Stop model closed at 50% on Friday. The model continues to indicate that investors should maintain their benchmark equity exposure.

The Day Hagan Catastrophic Stop model closed at 50% on Friday. The model continues to indicate that investors should maintain their benchmark equity exposure.

Equity market proxies grind higher as stocks rotate up and down. While I incorrectly expected a pullback or consolidation, some Advance-Decline Lines did not confirm new highs. The NYSE All Issues A/D Line has diverged for weeks, and the NYSE Common Stock Only for nearly a month.

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.