DOW Friday Closing Price - 45544
SPX Friday Closing Price - 6460
NASDAQ Friday Closing Price - 23415
RUT Friday Closing Price - 2366

With the exception of the RUT, every index generated a red weekly close on Friday. In the case of the SPX, it was a negative reversal week, given that the index did make a new all-time intraweek high at 6508 during the week. Having said that, it was an uneventful week as none of the reports that came out were out of line, to the point of being indicative. The inflation report on Friday was slightly higher than last months', but the expectation was that it would be, meaning it did not generate any kind of reaction.

The indexes did buck the seasonal tendency for August to be a red month, given that across the board, they all generated further upside above last month's highs and closed green and near the highs of the month, suggesting further upside above last month's highs (DOW at 45757, SPX at 6508, NASDAQ at 23966, and RUT above 2384). Nonetheless, the SPX closed in the lower half of the week's trading range, and the NASDAQ closed on the low of the week, suggesting further downside below last week's lows (SPX at 6429 and NAZ at 23353). This situation, plus the fact that September has seasonally been the worst month of the year, does open the door for the possibility that the monthly charts do not properly reflect what is to happen here, at the beginning of the week.

Adding to this uncertainty, there are several economic reports this week that can be catalytic. The ISM manufacturing report comes out Tuesday AM (expected to be 48.5% compared to last month's 48%), the PMI report also comes out on Tuesday (expected to be 55% compared to 53% the previous month) and the JOBS report on Friday (expected to be 75k compared to last months 73k). If both the former numbers come in lower than anticipated and the latter comes in higher than anticipated, it could be a catalyst for the market to head lower immediately. The ISM and PMI numbers are especially important this month as they are expected to start reflecting the results of the Tariffs.

Overall and at this moment and due to the probability that no dramatic changes to the fundamentals are expected to occur, there seems to be no reason for the seasonal tendency of September being the biggest down month of the year, to change. The market is way overdone (SPX is trading at a historically high PE ratio of 25 - norm being 15) and even the top company in the market this year (NVDA) reported earnings this past week that reflect a slowing down of growth. In simple words, the runaway freight train is starting to slow down and likely to come to a stop this month.

In looking at the charts, here is what to look for (regarding September fulfilling its seasonal tendency). In the DOW, the 45014 level on the daily closing chart is key short-term pivotal support level, which if broken would give a short-term target of 44116 (on a daily closing basis). In the SPX, the 6370 level if broken (on a daily closing basis) would open the door for a drop in September all the way down to 6144. In the NASDAQ, a daily close below 23142 would open the door for a drop all the way down to 22164 (in September). None of this breaks (if they occur) would change the longer term uptrend. In simple words, this would not be a game changer but simply a correction.

The RUT right now is not looking like it will mimic the other indexes as much as them. The small cap stocks have begun to show that the traders are starting to move back into them, and a correction in the market is not likely to affect this index as much as the others. Having said that, the 2317 level on a daily closing basis would generate selling interest. By the same token, the chart suggests the index could be heading high and perhaps as high as 2434 (closed at 2366 on Friday).

The SPX index will continue to be the indicative index and if it makes a new all-time high above 6508, the outlook for September could change. Having said that, there is one "key" report this month that is likely to be the deciding factor and that is the Fed's rate meeting on Wednesday the 17th. It is expected that they will cut rates by 25 points this month. A higher rate cut or no rate cut would generate a strong reaction. As such, it is likely that until that date, nothing of great consequence will occur. By the same token and with all the data mentioned above, the traders are not likely to be buyers at this level, meaning that the probabilities favor the next 2 weeks seeing more selling than buying, as a precautionary and safety action.

HSI Index generated a negative reversal week, having made a new 47-month intraweek/intramonth high and then closing red and near the low of the week, suggesting further downside below last week's low at 24808 will be seen. On the monthly chart, the index closed slightly in the lower half of the month's trading range, also suggesting a higher probability of going below last month's low at 24372 than go above last month's high at 25950. What confirmed this negative reversal is that the index gave a sell signal on the daily closing chart, when it closed below the previous low daily close at 25104 (closed at 24998 on Thursday and confirmed it with a close on Friday at 25077). The action and the closes seen on all 3 charts, does strongly suggest that a top to this rally has been found and that either a sideways trend, or the beginning of a downtrend has occurred. Confirmation of all of this may not occur until the index goes below last month's low and closes red on September 30th, but a weekly close below 24507 would increase the probabilities of this scenario being in play. If all of the above occurs, the downside target would be 22961 (on a monthly closing basis an 22736 on a weekly closing basis), which if those levels hold up, would mean a sideways trend. Negation of this scenario would come if a weekly close occurs above 25388.

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GOLD(Dec 2025 chart) continued the uptrend, having made a new all-time weekly closing high at $3516 (previous one was at $3508). Gold closed on the high of the week, suggesting further upside above last week's high at $3518 will be seen. The all-time intraweek high is at $3585 and a break of that level is the objective for this week. The new all-time daily and weekly closing highs have put the bulls in a situation where they are forced to confirm this breakout, meaning a weekly close above $3508 this Friday. A failure to do that, would take some ammunition away from the bulls. Fundamentally, what the Fed decides to do on the 17th of this month is the key right now. If the Fed decides not to lower interest rates, then the bulls will suffer. Anything else (most likely) will continue giving ammunition to the bulls.

OIL generated a totally uneventful week, given that nothing was broken on either side of the coin. Oil closed at the exact middle of the week's trading range, suggesting equal chances of going above last week's high at 65.10 or below last week's low at 62.98 (closed at 64.03). Having said that, the burden of proof remains on the shoulders of the bulls as the overall the downtrend continues to be in place (though it is stalled for now). There are 2 reports due out this week in the Oil market that are important. On Tuesday, the API report is due out and on Thursday the EIA reports comes out. These reports are monthly reports on inventory, supply, and demand and are likely to be pivotal. On a daily closing basis, the 62.80 and 64.68 are important on a short-term basis. A close below the former or above the latter should stimulate new buying or selling interest.

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