Near-term and intermediate-term technical trends remain bullish for US Equities, but the broader market has had a difficult time keeping up with the performance of SPX and QQQ over the last two months. The combination of overbought conditions coupled with a completion of DeMark-based exhaustion signals on daily charts for QQQ could still allow for some selling pressure potentially over the next 3-4 trading days (Historically, this week following September Options Expiration is seasonally negative, performance-wise). I don’t find the near-term risk/reward appealing this week with SPX now within striking distance of 6700, and price is near my upside resistance zone of 6700-6726. Given how stretched SPX has become lately, I feel that any daily close under the 9-day simple moving average (m.a.) (SPX-6639) should result in a test and possible break of 6600 and might lead to a test of 9/17 lows at 6551. Both DXY and Treasury yields have made minor bounces within their existing downtrends, and the technical bias remains for a pullback in both DXY and TNX in the weeks to come back to new monthly lows.
I think probably the most important technical takeaway of the last few weeks has less to do with Technology’s dominance, but more to the degree to which the broader market has not kept up with ^SPX nor QQQ 0.47% . I.e., Technology has rallied back sharply, but the broader market has lagged.
Looking back at the period where ^SPX made a minor peak nearly two months ago (July 23, 2025), Equal-weighted RSP closed at 187.43. Today’s close (Monday 9/22/25, nearly two months later, RSP -0.24% closed at 188.48). Thus, Equal-weighted ^SPX has barely budged. While we’ve seen periods like this before, it’s going to be important for the broader market to close this gap and not fall further behind in the weeks to come.
^SPX closed at 6693.74, or higher than 5% from lows established back on 9/2 at 6360.58. Yet, as we know, most of this move was Communication Services and Technology. Thus, while the trend below looks quite bullish, it also has gotten quite stretched with AAPL 4.34% now having reached levels right near resistance at former highs. Any hint of a reversal on Tuesday would likely test this uptrend, but also likely would prove short-lived this week.
S&P 500 Index
NVDA 3.97% showed a minor breakout on Monday, and as the largest percentage stock within ^SPX, this looks important
Whether or not Equal-weighted ^SPX can play catch-up certainly doesn’t mean Technology will sit and wait for this to happen.
Case in point, Monday’s NVDA 3.97% surge on the news of the OpenAI investment helped propel the stock to above a key minor resistance high that marked a downtrend over the last couple of weeks.
Technically, I feel this makes NVDA 3.97% quite appealing for a push up to $200, and it looks appealing as of Monday’s close, and would become more appealing on any minor pullback this week.
Thus, even if the broader market does not immediately play catch-up to Technology, it still looks right to favor NVDA 3.97% for gains up to $200 over the next month, technically speaking.
NVIDIA Corporation
AAPL 4.34% now lies near initial resistance, just under All-time highs
Another fascinating observation for those wondering about other examples of Technology stocks having shown impressive relative strength lately concerns AAPL 4.34% .
As shown below, AAPL 4.34% has run up $17 or roughly 7% in the last two trading days since last Thursday. Meanwhile, market breadth finished just fractionally positive today, despite 9 sectors out of 11 closing down on the session. As always, it pays to understand what’s driving performance for ^SPX and/or QQQ 0.47% , as AAPL 4.34% comprises between 6-8% of both, respectively. Thus, for today’s ^SPX positive gains, it does look important that XLK 1.42% and RSPT 1.11% were both higher by more than 1% while Financials, Energy, Materials, Consumer Discretionary, Communication Services, and Consumer Staples all closed lower by more than -0.50%.
As shown below, the recent strong performance in AAPL 4.34% is certainly a technical positive. However, it’s now nearing what I consider to be a very strong level of resistance in the near-term. This lies at $260.10, or roughly $4 higher than Monday’s close.
I expect that any slowdown in AAPL 4.34% , barring the broader markets’ strong upward participation, might result in a minor slowdown this week.
Apple
Performance illustrates this giant divergence between sectors
The latest performance data shows an interesting amount of bifurcation between sectors that’s unusual to concentrate on given that ^SPX has been seemingly on a “Melt-up” in recent weeks.
As seen below, only three sectors have been positive of the 11 major sector ETFs in the past month when measured on an Equal-weighted basis among the 11 major Sector ETFs: Technology, Communication Services, and Energy.
Meanwhile, eight sectors have fallen more than 1% in the last month, despite ^SPX and QQQ 0.47% having reached record heights.
This kind of divergence has the potential to be troubling if/when Technology’s torrid runup stalls out.
Technically I don’t view this as being healthy given that a handful of Data Storage and Semiconductor names have gotten very overbought while the majority of the market has been grinding sideways.
However, until/unless the ^SPX and QQQ 0.47% begin to turn down this week, it’s certainly possible (similar to 2021) that Technology could continue to outperform even if the broader market doesn’t participate. This might create an even larger amount of sector divergence. At present, it’s an interesting observation only, and it’s wise to keep a close eye on sector participation and/or lack thereof.
Invesco S&P 500 Equal Weight ETF
CBOE Equity Put/call ratio hits the lowest levels in two months
One sentiment tool I have shown over the past year is the CBOE Equity Put/call ratio, as I feel it can often be important when it hits extremes.
Normally, I find any reading above 0.90 as possibly being important, along with readings under 0.50. Times when (PCUSEQTR- Bloomberg) spikes above 0.90 show times when nearly an equal amount of Put options are being traded as call options. Normally, extreme readings like this can be important when trying to identify possible lows in the stock market.
Conversely, when this ratio spikes below 0.50, it normally can show speculation, as two call options are being traded compared to each Put option. Readings of this sort happened in mid-May as well as January of this year, preceding corrective periods for stocks.
While most of my other sentiment gauges, like AAII, Fear and Greed index, CTA exposure, CFTC data, JP Morgan Global Equity Sentiment, along with the Bank of America Global Portfolio Managers Survey, remain far from levels that would be seen as bullish, I do typically find that readings under 0.50 on the Equity Put/call can be short-term Sell triggers for the US stock market.
The one caveat is that the September Option expiration resulted in the large call option roll off at 6500 as part of a collar trade. According to Michael Ball at Bloomberg, this position has “provided a cushion of positive gamma that has provided a floor for the current ^SPX range.”
Overall, I tend to view extreme Put/call readings in either direction as being not too important if they happen right at important Option expirations. However, given the build up in bullish sentiment for AAII last week (despite the plurality still being bearish) and a very low Equity Put/call reading, I sense it’s likely time to pay attention now that many of the large Dealer options positions have been taken off the board.
As seen below, the spikes in Equity Put/call above 0.90 shown by the red arrow tended to happen near market lows. Meanwhile, last Friday’s extreme Equity Put/call reading proved to be the lowest since May. We’ll see in the days ahead if volatility starts to pick up during this seasonally weak time. Despite ^SPX being higher by +0.44%, the CBOE Volatility Index closed up approximately +3%.
PCUSEQTR Index
