Weekly Update S&P 500

Hello everybody, and welcome to this week’s analysis of the S&P 500. I’m writing this shortly before the New York market opens on Friday, so we don’t yet have the full day’s action included. For now, the S&P 500 is up about 1% this week, and we’ve had some interesting news.

On one hand, we had weaker-than-expected CPI data, leaning toward the deflationary side. On the other hand, we had hotter-than-expected PPI data, which raises inflation concerns. These are two conflicting signals, both of which will be important for the Fed’s September decision on whether to cut rates.

Last week, we discussed the short-term channel visible on the 4-hour chart — represented by the black trendlines. If those two inner trendlines in the middle of the channel are broken, that would be a sign of weakness. Earlier this week, we saw a retest of those lines on Monday and Tuesday, followed by strong gains through the rest of the week, pushing the market to new all-time highs. Since the short sell-off in early August, the short-term trend has been very strong.

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August Sell-Off Fades as Market Resumes Strong Uptrend

Looking at the daily chart, prices made new all-time highs this week and closed above them. We now have a support zone around 4,610 points. For now, we are clearly in an uptrend. While we discussed potential weakness in recent weeks — and saw a short-lived sell-off in early August that many expected to extend — the market quickly recovered.

We’re still in a seasonally weaker part of the year, with August and September often seeing pullbacks, so another sell-off in the coming weeks is still possible. From a technical perspective, the S&P 500 is holding above the lower boundary of its rising trend channel since April. As long as we stay in that green-shaded area on the chart, the dominant uptrend remains intact. If we break below it, a deeper correction could follow.

For now, the trend is still up, but we are back in overbought territory, which could limit upside potential in the near term. The market is strong, but signs are in place for a potential corrective phase in the weeks ahead.

We also have an article on the broader S&P 500 outlook. From a big-picture perspective, the technicals on the weekly chart are less positive and suggest that another correction could be developing in the coming weeks.

For subscribers it is very important to follow our risk management measures that we provide with all our services to protect against losses in case support zones break

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S&P 500: Seasonality Insights for 2025

So far this year, the seasonal pattern for the S&P 500 has played out pretty much as expected. The first few months brought some noticeable volatility, which lines up with what we usually see in the early part of the year. Historically, January and February tend to be choppy, and that turbulence can sometimes stretch into March — and that’s exactly what happened this year.

In April, we had a sharp correction, which doesn’t line up exactly with the seasonality pattern. However, it might have been the May or June weakness playing out early this year in April. Since April, we’ve seen a very strong rise into the summer, all the way to the end of July. That, on the other hand, aligns very well with the seasonality.

Now, of course, we are looking into August and September, which are typically weak months of the year. The setup of starting a downturn in August seems to be right on time when we look at seasonality — you can see how prices in August and September tend to have big swings up and down, with a lot of volatility. Therefore, August and September should be expected to bring some weakness.

We will keep an eye on this, and then, when we come into October, we reach the strongest phase of the year. October, November, and December typically bring the year to an end with very strong seasonality. We will see if this holds true this year as well.

Of course, this isn’t a guarantee — it’s more of a roadmap based on past patterns. Ultimately, seasonal trends provide valuable context, but they must be considered alongside current market dynamics and technical analysis for a clearer picture.

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The world of finance is complex and includes many technical terms. For explanations of these terms, I recommend using the Investopedia dictionary.