Pre-opening Comments for Friday August 22nd
U.S. equity index futures were higher this morning. S&P 500 futures were up 17 points at 8:30 AM EDT.
Federal Reserve Chairman Powell is scheduled to speak at 10:00 AM EDT at the Jackson Hole Symposium.
Ross Stores added $2.98 to $148.60 after reporting higher than consensus second quarter results. The company also offered positive guidance. Seasonal influences are favourable until January 10th. See seasonality chart at www.EquityClock.com
Workday dropped $8.58 to $219.00 after offering third quarter guidance below consensus.
Zoom Media added $4.16 to $77.33 after reporting higher than consensus second quarter revenues and earnings.
Intuit dropped $38.77 to $658.99 after offering fiscal quarter guidance below consensus.
EquityClock’s Market Outlook for August 22nd
Data on existing home sales suggests that the wealth effect that elevated consumer activity for the past few years has been turned off. See:
https://equityclock.com/2025/08/21/stock-market-outlook-for-august-22-2025/
Technical Notes
S&P 500 Index, NASDAQ 100 Index and their related ETFs (SPY and QQQ) moved below their 20 day moving average. All are trading below late July prices.
CVS Health (CVS) an S&P 100 stock moved above $71.73 extending an intermediate uptrend.
Pfizer (PFE) a Dow Jones Industrial Average stock moved above $25.61 extending an intermediate uptrend.
Analog Devices (ADI) a NASDAQ 100 stock moved above $247.73 to an all-time high extending an intermediate uptrend.
PDD Holdings (PDD) a NASDAQ 100 stock moved above $121.49 and $122.99 extending an intermediate uptrend.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for August 21st 2025
Green: Increase from previous day
Red: Decrease from previous day
Source for all positive seasonality ratings: www.EquityClock.com
Commodities
Daily Seasonal/Technical Commodities Trends for August 21st 2025
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for August 21st 2025
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
The Market’s AI Spending Problem: Guy Adami, Dan Nathan and Liz Thomas
https://www.youtube.com/watch?v=FmIfO_wjYJI
Is The Growth Stock Bubble Bursting? Tom Bowley
https://www.youtube.com/watch?v=ZRVJQUALjaw
New Stocks Breaking Out While Big Tech Falters! David Keller
New Stocks Breaking Out While Big Tech Falters! – YouTube
A market pullback of 5-10% is natural and healthy, says Aureus’ Kari Firestone
A market pullback of 5-10% is natural and healthy, says Aureus’ Kari Firestone – YouTube
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 2.20 to 62.20. It remains Overbought.
The long term Barometer dropped 0.60 to 64.20. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer added 4.27 to 66.82. It remains Overbought.
The long term Barometer added 1.90 to 81.52. It remains Overbought.
Disclaimer: Seasonality ratings and technical ratings offered in this report and at
www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.
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August 22nd, 2025 at 2:28 pm
IWM (highest since Dec) and RSP (new all-time) blasting to new highs. There’s your market broadening. QQQ and SPX up sharply. We have not had anything yet this month to point to a market that has topped out. Thank you Jay Powell.
August 22nd, 2025 at 11:14 pm
Larry
The trend before today looked to be cooling for tech. While it has reversed due to Mr Powell, I am still skeptical we will not revert next week while in the throws of summer. True the trend could just continue to move up, but this will only provide a larger pullback somewhere down the line. Today does not change my short term outlook only reinforce to very careful till we get more information.
Best insight was a summary from the article by Praetorian Capital hedge fund manager Harris Kupperman
“At the end of the day, this AI cycle feels less like a revolution and more like a rerun. I’ve seen this story before—fiber in 2000, shale in 2014, cannabis in 2019. Each time, the technology or product was real, even transformative. But the capital cycle was brutal, the math unforgiving, and the equity holders were ultimately incinerated. AI will be no different. The datacenters will be built, the chips will hum, and some of the capacity will eventually prove mind-blowingly useful. But the investors footing the bill today will regret ever making the investment. That’s how bubbles end—not with a bang of innovation, but with the slow, grinding realization of negative returns, for years into the future. When shareholders finally wake up to the fact that AI isn’t generating cash flow, only burning it, the guillotine will fall—on management, on the stocks, and on the broader market that bet its future on a fantasy.”
August 23rd, 2025 at 9:17 am
Bman/Van – Bubbles occur but this hedge fund manager is quite disingenuous trying to compare AI to things like cannabis, shale or the dot.com stock peak of 2000. Revenue growth through the use of AI was eye popping for the likes of MSFT and META this quarter. We are now seeing natural sector rotation that will occur and we will be back to tech leading the market at some point. The lift in other sectors of the market is a very healthy sign. Market breadth is a signal of a rising market whereas a greatly narrowing breadth is a signal of a possible top. We are in a rate cutting cycle now and that is what is lit a fire under the market and will be supportive. Drops occur but just because everyone knows September is traditionally weak does not mean it happens the same way every year.
August 24th, 2025 at 4:12 pm
Larry/ON and Bman/Van, you both have convincing arguments. I just watched Ciovacco’s video from last week (August 15 – I am a week behind). He shows long term charts of the relative strength of $NDX:$SPX and IWM:SPY. The recent “broadening” are just blips within long term secular down trends. If one can be nimble and not mind tax consequences, these might be tradeable, but if not, the best strategy (not tactics) would be to stay with the long term trend. I find this easier said than done.
https://www.youtube.com/watch?v=sgkuesp9Rwc&t=3s