Near-term and intermediate-term technical trends remain bullish for US Equities, and Monday’s rally gave some much-needed confidence that SPX should push back to new highs over the next week, given above-average breadth and a drop in both the US Dollar and US Treasury yields. While August has proven quite negative seasonally speaking in post-election years since 1950, I don’t suspect much of the weakness gets underway until the August expiration. Overall, it’s technically right to favor that this SPX rally can continue into mid-August before any “stalling out,” and there should be a similar rally in Treasuries, Euro, and Yen vs. the US Dollar. While technical risks are certainly rising in recent weeks, it looks premature to concentrate on these at present as indices begin a climb back to new all-time highs and trends remain positive. My view is that this coming week could prove to be the most positive week of performance for August before some slowdown gets underway.
Daily ^SPX charts shown below illustrate the successful closing of the gap from late last week as market breadth expanded by more than a 4/1 ratio of Advancing vs. Declining issues. Volume also flowed into Advancing issues by more than a 4/1 ratio than declining and this represented a strong, much-needed rally following the late week selloff of last week.
I find it technically important that both US Dollar index (DXY) and US 10-Year Treasury yields (^TNX) both made dramatic About-face reversals over the last two trading days, and this bodes well for US Equities to likely rally back to new highs as both yields and DXY weaken.
As shown below, ^SPX managed to get back above the intra-day lows from last Thursday that represented the low that preceded Friday’s gap-down. This is a minor positive and will turn more bullish above 6336-6345 which is important on hourly charts.
Such a move should result in ^SPX pushing higher to test and exceed late July peaks at 6427.02. I expect this is likely between now and mid-August and agree with Tom Lee that 6500-6600 is a definite possibility in the coming week ahead of a slowdown.
S&P 500 Index
Treasury yields rapid decline points to further weakness in yields over the next month
I had suspected that yields might be on the verge of a minor pop ahead of a decline, but last week’s pullback in yields solidified that yields have begun a steep pullback that likely should coincide with Equities rising as more FOMC cuts start to be priced into the market.
Last Friday’s large high-to-low range candle was a big technical negative, and the CBOE 10-year Treasury Note index (^TNX) closed last Friday at the lowest levels since early May.
This likely can cause yields to accelerate lower in the near-term, and I suspect that 4.15% is initially possible before a minor bounce, followed by a larger decline that tests and breaches April lows.
Overall, it’s right to be bullish on Yields over the next month, as the cycle composite seems to have “won the battle” in suggesting that a yield pullback into August was likely.
US Government Bonds 10 YR Yield
Precious and Base metals, along with precious metals stocks, likely have ended their recent consolidation and can rally into October
Following a lengthy period of consolidation since early June, Gold, Silver, and precious metals stocks have all been churning in range-bound consolidation.
This looks to have run its course as GDX 1.14% , the VanEck Gold Miners ETF, officially broke out to the highest levels since 2012 on Monday’s close above late July’s daily close of $54.48 back on 7/23/25.
This is a very bullish move for this Gold miner ETF, and could lead this back to challenge all-time highs from 2011 over the next couple of months in the high $60’s.
Spot gold actually lagged the move in the Miners on Monday and still lies below $3439 which is an important area for Gold in the days ahead.
Overall, I find Gold, silver, precious metals, and mining stocks quite attractive technically for a rally into October of this year. GDX’s bullish close should help it extend higher in the days and weeks to come.
VanEck Gold Miners ETF
Consumer Staples is being upgraded technically to Neutral following momentum improvement and counter-trend exhaustion signals
Consumer Staples likely should perform in line with ^SPX this month as early month underperformance gives way to late month outperformance on possible Equity market weakness.
I have been Underweight Consumer Staples for the majority of 2025, but there are two major reasons why I see it fit to change this rating to Neutral:
- Momentum indicators have started to improve on relative charts to RSP. As shown below, the ratio charts of RHS -0.81% (Invesco’s Equal-weighted Consumer Staples ETF) have made a bullish crossover arguably in the last week following its steep decline.
- DeMark indicators like TD Sequential have now produced a “TD Countdown 13” exhaustion signal (Buy) that could be confirmed in the next month. While this requires a monthly close above the close from four months prior for confirmation (For August, this ratio chart would need to eclipse April’s month-end close, but would get easier in September) I expect that this sector might try to make a tactical bottom this month, not unlike what happened in 2014, 2018, and 2021.
Stocks like HSY -0.33% , DLTR -1.23% , SJM -1.96% , LW -0.20% , KVUE -0.52% , and EL -1.35% are all higher by 4%+ in the last month, and this strength has been notable in recent weeks.
An uptick in relative strength would directly coincide with a possible period of market weakness starting later this month. Thus, while Consumer Staples certainly doesn’t look bullish relative to the Equal-weighted S&P 500, I suspect it performs in line and possibly outperforms in September.
RSPS/RSP
