Near-term and intermediate-term technical trends remain bullish for US Equities, but Tuesday’s setback might have kicked off the start of a minor pullback in Stock indices, lining up with a traditional “Sell Rosh Hashanah, Buy Yom Kippur” theme, which could allow for continued weakness into next week before US Equity markets stabilize and begin to turn higher. As detailed in recent days, there’s been some massive divergence between Technology and the broader market of late. Furthermore, short-term overbought conditions are present along with some DeMark-related exhaustion signals, which might result in some short-term consolidation for US indices. While neither SPX nor QQQ has technically violated short-term support, which would suggest this move has definitely gotten underway, 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 off 6600 and might lead to a test of 9/17 lows at 6551. Both DXY and Treasury yields should be in the process of rolling over following minor bounces this past week. Finally, the rally in precious and industrial metals has continued, and it still seems early to avoid this area, despite how overbought momentum has become lately.
Tuesday’s decline happened to occur right into a window where seasonal weakness typically does occur in September, and prices largely closed near the lows of the session, within three points of where Monday’s opening price occurred.
Despite Micron Technology’s (MU 9.11% ) better-than-anticipated earnings report, I’m still of the opinion that markets are in a window where selling pressure might occur into next week.
Strong technical resistance looks to be between 6700-6726, while support could materialize near 6600 or below this, near 6551 in ^SPX.
My own view is that 3-5 days of weakness are possible before a push higher into mid-October. If Wednesday’s trading results in price pushing higher, then I feel that it could still likely weaken into end of the month, aligning with a “Sell Rosh Hashanah, Buy Yom Kippur” type seasonality.
However, in the bigger scheme of things, any weakness would make SPX attractive for rallies into mid-to-late October, and I’m skeptical that Tuesday’s weakness represents the start of any meaningful selloff.
However, at present, market breadth remains a near-term concern, despite more volume having flowed into Advancing issues vs. Declining as of Tuesday’s close.
I’ll look at any weakness over the next 1-2 weeks as something which should make SPX attractive for buying dips, and anticipate that a push back higher above 6800 is quite likely into October once some consolidation is complete.
Levels for the next couple of weeks are as follows:
SPX – Support – 6625, then 6600, 6551; Resistance – 6699, then 6726
QQQ – Support – 593, then 583; Resistance: 601, 615
S&P 500 Index
Micron Technology looks attractive and is still good to own technically
I felt it might be appropriate to comment on MU 9.11% technically into earnings but ahead of their earnings call as this stock plays a big role within the Semiconductor and Storage space within Technology, and has enjoyed a massive runup of late.
Q1 earnings came in at $3.60-$3.90 vs. $3.04 estimate, while adjusted Revenue was $12.2-12.8 billion vs. $11.91 estimated. The stock has pushed up to $170 post-earnings after having closed Tuesday, 9/23/25, at $166.46. MU 9.11% still shows insufficient reasons to avoid it here, besides being stretched.
I expect an eventual push to $211, which might happen in October, while the area at 100% of its July highs is also important, which lies near $206. Regardless of any conservative guidance that might come, it’s right to own this stock, technically speaking, and look to buy dips, if given the chance. The rally above June 2024 peaks happened on good volume, and there is still not sufficient evidence of upside DeMark-related exhaustion to avoid this, which is premature at this time. Thus, support is found at $157.83, then $151, and initial resistance lies at $180. Any dip in the days ahead should make this even more attractive from a risk/reward perspective, but I feel that even at current levels, more gains could be likely into the month of October.
Micron Technology
Treasury yields and US Dollar look to be rolling back over after the minor bounce
Tuesday brought about a big reversal back lower for US 10-year Treasury yields as well as the US Dollar index following a bounce after last week’s FOMC meeting.
Technically, both ^TNX along with DXY should begin to trend lower into mid-October before any stabilization and Q4 bounce.
Targets on the downside should materialize near 3.86-3.90%, but even near 3.95% might make sense to consider support over the next month.
Cycles maintain a bearish bias for yields, but do show the possibility of a bounce for both the US Dollar and also yields into year-end (this might begin either in late October or November- not shown)
For now, technical trends remain bearish for yields, and following four straight sessions of higher yields, I think the risk/reward is attractive to be long Treasuries with strong resistance at 4.18% while a move lower to 3.99% looks most likely initially by the end of the month.
Thereafter, a break of 3.99% would satisfy the minimum count of a 5-wave Elliott-wave style decline in yields from July and might allow for some stabilization and a sharp bounce in yields.
While some analysts have begun to emphasize growth as recession fears seem to have faded and GDPNow is tracking 3.3% growth for the third quarter. Yet technicals still seem to favor a flush to new lows for both TNX and DXY before it’s right to expect a bounce.
Technically, it looks right to still favor gains in SHY -0.02% , IEF -0.49% , and TLT -1.04% in the coming month. While the US 10’s-2’s curve has flattened a bit in the last month, we’ve seen a global breakout in 10’s-2’s curve globally (not shown), and it’s thought that an eventual further steepening in the yield curve could be likely into year-end.
US Government Bonds 10 YR Yield
Precious Metals like Gold are getting stretched, but it still looks early to sell
Precious metals rallied sharply by another 1% today (spot gold up +0.46% while Gold Futures were higher by +1.1% and Silver futures up +0.89%).
While price is nearly at my 3800 target for Spot Gold for 2025, the timing of any potential peak looks early by around three weeks. Thus, while overbought, and Demark-related 13’s exist now on the SPDR Gold ETF GLD 1.16% , (13 Countdown Exhaustion signals” there is no monthly exhaustion and Gold Futures remain early also on a weekly basis per TD 13 Countdown signals as well as TD Sell Setups by three weeks.
Monthly RSI for Gold has now reached 90, a level that hasn’t been seen since 1979. Yet, this trend remains parabolic in the short-term, and it’s necessary to let prices show some evidence of exhaustion before rushing to take profits on longs. This continued escalation looks to have more to do with real rates falling than the Dollar dropping, as Gold is also rising sharply in Swiss Francs.
I’ll follow this closely in the weeks to come, but still believe it’s right to stick with bullish positions in the precious metals and metals stocks until early to mid-October.
I feel that price and time aligning will ultimately prove more important than any new target, but this might materialize between $3900-$4000 within 3-4 weeks’ time.
CFD’s on Gold (US$/OZ)
