Stock Market Evaluation 9/20

[Luckyone]

Here is my stock market evaluation made on 9/20:

Confusion reigns but upside momentum persists!
​

DOW Friday Closing Price - 46315
SPX Friday Closing Price - 6664
NASDAQ Friday Closing Price - 24626
RUT Friday Closing Price - 2448

This past week was a clear win for the bulls and that was even more indicative, given that the Fed rate decision was announced (no surprise) and the reaction was positive. With no possibly catalytic reports due out the next 2 weeks, it does suggest that both seasonal tendencies (August and September) of the indexes correcting (having a red month), will be negated. This is not only surprising, but it does affect the normal fundamental trading patterns, meaning that confusion reigns. Having said that, the market is on an uptrend of consequence and momentum is what is now driving the market (bears unwilling to attempt to stop the runaway train), meaning that the probabilities favor more upside to be seen the rest of the month.

All the indexes made a new all-time intraweek and weekly closing high, and closed on or near the high, suggesting further upside above last week's highs will be seen this week. In the DOW that is above 46396, in the SPX that is above 6671, in the NASDAQ that is above 26641 and in the RUT that is above 2472.

On a purely chart basis, there is great risk in purchasing stocks, at least those that have been running to the upside. Not only are the overbought but have no close-by support levels that can be used to minimize risk. In the DOW, the closest support level is at 45400 (900 points lower). In the SPX, it is at 6360 (304 points lower), in the NASDAQ it is at 22927 (1699 points lower) and in the RUT, it is at 2329 (215 points lower). The worst part of it, is that all of these support levels are minor in nature (not game changers). This means that a drop down and breakage of these support levels would not change the uptrend (except for the short-term), meaning that a bull getting out upon breakage of those levels would not necessarily be the right thing to do. However, this scenario does mean that the bulls will be cautious (not aggressive) in their buying, and that would suggest the upside is likely to be small or even minimal.

One thing to consider is that the fundamental analysis of the SPX shows a wide range of opinions, running from 6600 to 7500, with the average being 6900 by year's end. With the index closing at 6664 on Friday, it does suggest that the index will not likely rise more than 3.5% the rest of the year.

One last thing to consider is that this market has been mostly driven by AI, and any news regarding AI that is less than anticipated, could be a catalyst for a correction. One thing that did happen this past week is that NVDA announced that it was investing $5 Billion in a partnership with INTC (former competitor) in the making of chips for AI, and that is seen as a positive but does open the door for problems to occur as it could close the door on cheaper AI chips from other countries, or even problems with the partnership that could be detrimental overall.

Having said all of the above, the traders are now going to make daily evaluations on the action seen, and at this time, it is impossible to predict with any certainty as to what will happen the rest of the month.

 

[Darkwind]

No, I fully expect the markets to contract over the next six weeks and then moderate for the holiday sales.

Of course, if holiday sales are disappointing, the market may contract even more.

 

[Luckyone]

No, I fully expect the markets to contract over the next six weeks and then moderate for the holiday sales.

Of course, if holiday sales are disappointing, the market may contract even more.

Such a contraction has been expected during the past 6 weeks, given that seasonally the indexes fall in August and September, with September almost always being the worst month of the year. Nonetheless, that has not happened, meaning that your opinion is noted (and in my opinion - probable) but this market has not done what has been expected of it for many months now.

No one (and I mean even the big money and highly knowledgeable people) have any clear idea of what will happen. Meaning that your opinion carries no dependable weight.

 

[Darkwind]

Such a contraction has been expected during the past 6 weeks, given that seasonally the indexes fall in August and September, with September almost always being the worst month of the year. Nonetheless, that has not happened, meaning that your opinion is noted (and in my opinion - probable) but this market has not done what has been expected of it for many months now.

No one (and I mean even the big money and highly knowledgeable people) have any clear idea of what will happen. Meaning that your opinion carries no dependable weight.

I didn't offer it to carry weight. Just to make an opinion known.

 

[x chicago]

Sure, lemme read some long winded farts from yet another financial forum guru. lol

 

[Mac1958]

We're clearly overbought right now, and a correction of 3% to 10% would be perfectly healthy.

The market's still not sure of the final effects of the tariffs (on both inflation and corporate earnings, since American corporations are the ones paying the tariffs), but we should have a lot more clarity by the end of the year.

It does look like CapEx and hiring are being pulled back because of hits to bottom lines, but that's not necessarily permanent.

If it's just a regular correction, that's fine. If it's something else, we'll see. No one knows.

 

[marvin martian]

We're clearly overbought right now, and a correction of 3% to 10% would be perfectly healthy.

The market's still not sure of the final effects of the tariffs (on both inflation and corporate earnings, since American corporations are the ones paying the tariffs), but we should have a lot more clarity by the end of the year.

It does look like CapEx and hiring are being pulled back because of hits to bottom lines, but that's not necessarily permanent.

If it's just a regular correction, that's fine. If it's something else, we'll see. No one knows.

^^^This from the guy who sold everything back in 2016 because Paul Krugman said Trump would cause a worldwide depression.

LOL

 

[odanny]

^^^This from the guy who sold everything back in 2016 because Paul Krugman said Trump would cause a worldwide depression.

LOL

^^^^ This from the guy who does not have a pot to piss in.

 

[Mac1958]

Having said all of the above, the traders are now going to make daily evaluations on the action seen, and at this time, it is impossible to predict with any certainty as to what will happen the rest of the month.

It's pretty clear now that Bessent thinks he can run this whole thing hot -- so, higher growth and higher inflation. I'm guessing we'll see the "target inflation rate" increased to at least 3% from 2%.

If the market decides it can live with that, we may be off and running. It's so different from the way we've been doing things that I haven't really thought it all through yet. The market understandably wants to believe in it, and sometimes that's all that matters.

 

[Nobody911]

Should congressional stock trading be taken into consideration? Think for yourselves. Many American politicians are untrustworthy. Be cautious! lol.

Over the next two weeks, congressional trading activity is likely to remain elevated due to Congress being in session and ongoing geopolitical and economic uncertainties.

Studies have shown that members of Congress trade significantly more during active sessions and times of market volatility, often increasing buy orders when risk indicators spike. Such trading typically focuses on sectors sensitive to current legislative priorities and geopolitical events, including defense, energy, semiconductors, and technology. This pattern provides clues about upcoming market movements since members’ trades often precede public news.

However, there is growing public scrutiny and legislative effort to ban or restrict congressional stock trading due to concerns about conflicts of interest and insider trading. While some lawmakers advocate for stricter rules or blind trusts, these measures have yet to become law, so trading disclosures continue to offer actionable insights to investors.

In summary, expect heightened congressional trading activity in the near term, especially in high-risk sectors and amid news-driven market fluctuations. Investors and traders monitor these activities closely to anticipate market trends, though future regulations could change this dynamic soon. investopedia+3

sources:

1. How Stock Trades By Members of Congress Could Affect Your Portfolio and Why It Matters
2. https://www.insiderfinance.io/congress-trades
3. https://www.nytimes.com/2025/08/16/us/politics/bresnahan-congress-stock-trading.html
4. Negative Trading in Congress
5. Solving the Congressional Stock Trading Problem
6. Congressional Stock Trading, Explained
7. Congressional Stock Trading and the STOCK Act
8. Congressional Stock Trading Severely Undermines Public Trust and Compliance with the Law
9. https://www.sciencedirect.com/science/article/abs/pii/S0047272722000044
10. https://www.sciencedirect.com/science/article/abs/pii/S1059056024005835

 

[Delldude]

Things moving along even with the possibility of a shutdown.​

Dow closes at record high, S&P 500 logs winning month, as investors shake off government shutdown concerns​

Tuesday’s moves added to the major U.S. stock indexes’ solid monthly gains for September. The S&P 500, which has averaged a 4.2% drop for the month over the last five years, increased more than 3% this month, and the Dow gained nearly 2%. The Nasdaq outperformed with a 5.6% gain in September.

Tuesday additionally brought the end of the third quarter. The broad market S&P 500 was up almost 8% quarter to date, while the tech-heavy Nasdaq notched a more than 11% quarterly gain. The blue-chip Dow was up more than 5% since the end of June, its fifth straight quarterly advance.

https://www.cnbc.com/2025/09/29/stock-market-today-live-updates.html

 

[San Souci]

^^^This from the guy who sold everything back in 2016 because Paul Krugman said Trump would cause a worldwide depression.

LOL

How about all the Dems saying Tarrifs would crash it last April?

 

[SweetTea]

How about all the Dems saying Tarrifs would crash it last April?

The market will eventually take a downturn and they will then claim they were correct. Even if it doesn't happen until Trump leaves office and a Democrat takes over(God forbid), they will blame the downturn on Trump and his tariffs. They can't ever admit they were wrong. It isn't in their DNA.

 

[Luckyone]

The market will eventually take a downturn and they will then claim they were correct. Even if it doesn't happen until Trump leaves office and a Democrat takes over(God forbid), they will blame the downturn on Trump and his tariffs. They can't ever admit they were wrong. It isn't in their DNA.

Are tariffs bad for growth? Yes, say five decades of data ...​

https://pmc.ncbi.nlm.nih.gov/articles/PMC7255316/
AI Overview

Economic experts confirm that the full, negative impact on the broader economy of tariffs often takes months or even years to fully materialize. This time lag occurs for several reasons, including strategic actions by companies and the gradual nature of economic adjustments.

How tariffs cause a delayed negative impact

Corporate strategy and inventory management

• Inventory drawdown: In anticipation of tariffs, many businesses "front-run" imports by stockpiling goods. This creates a cushion that allows them to delay price increases for several months while they work through their existing, untaxed inventory. As a result, the immediate impact on consumer prices is not always apparent.
• Absorbing costs to protect market share: To avoid losing customers to competitors, companies often absorb the initial cost of tariffs, which squeezes their profit margins. However, this strategy is only sustainable for a limited time. As margins shrink, businesses eventually begin passing on costs to consumers or cutting back on other expenses.
• Diversifying supply chains: Some companies attempt to mitigate tariff costs by relocating manufacturing or finding new suppliers in countries not subject to tariffs. This process is slow, expensive, and can cause temporary disruptions, but it also delays the full effect of the tariffs from being realized.

Gradual economic adjustments

• Pass-through to consumers: The actual increase in consumer prices from tariffs is typically not a sudden shock but a gradual process. Economists have observed that the "pass-through at the retail level tends to be very gradual". For some goods, it can be months or years before the full price increase is passed on to consumers.
• Investment and labor impact: The long-term economic damage from tariffs often comes from reduced business investment and job growth, which takes time to manifest. As uncertainty around tariffs lingers, companies may pause hiring and investment decisions. Yale's Budget Lab estimates that 2025 tariffs will significantly lower payroll employment by the end of 2025 and 2026.
• Reduced productivity: Tariffs can reduce a country's overall productivity and income by creating inefficiencies in resource allocation. Studies indicate that this can lead to a persistent decline in GDP over several years.
• 
  
• Historical evidence: Major trade disputes throughout history, such as the 1930 Smoot-Hawley Tariff Act, show that tariffs take time to inflict their full economic damage. Even recent examples show that markets can recover relatively quickly from initial volatility, but the underlying trade war takes much longer to resolve, continuing to influence long-term trends in corporate earnings and supply chains.

 

[Delldude]

 

[SweetTea]

Are tariffs bad for growth? Yes, say five decades of data ...​

Are tariffs bad for growth? Yes, say five decades of data from 150 countries - PMC
AI Overview

Economic experts confirm that the full, negative impact on the broader economy of tariffs often takes months or even years to fully materialize. This time lag occurs for several reasons, including strategic actions by companies and the gradual nature of economic adjustments.

How tariffs cause a delayed negative impact

Corporate strategy and inventory management

• Inventory drawdown: In anticipation of tariffs, many businesses "front-run" imports by stockpiling goods. This creates a cushion that allows them to delay price increases for several months while they work through their existing, untaxed inventory. As a result, the immediate impact on consumer prices is not always apparent.
• Absorbing costs to protect market share: To avoid losing customers to competitors, companies often absorb the initial cost of tariffs, which squeezes their profit margins. However, this strategy is only sustainable for a limited time. As margins shrink, businesses eventually begin passing on costs to consumers or cutting back on other expenses.
• Diversifying supply chains: Some companies attempt to mitigate tariff costs by relocating manufacturing or finding new suppliers in countries not subject to tariffs. This process is slow, expensive, and can cause temporary disruptions, but it also delays the full effect of the tariffs from being realized.

Gradual economic adjustments

• Pass-through to consumers: The actual increase in consumer prices from tariffs is typically not a sudden shock but a gradual process. Economists have observed that the "pass-through at the retail level tends to be very gradual". For some goods, it can be months or years before the full price increase is passed on to consumers.
• Investment and labor impact: The long-term economic damage from tariffs often comes from reduced business investment and job growth, which takes time to manifest. As uncertainty around tariffs lingers, companies may pause hiring and investment decisions. Yale's Budget Lab estimates that 2025 tariffs will significantly lower payroll employment by the end of 2025 and 2026.
• Reduced productivity: Tariffs can reduce a country's overall productivity and income by creating inefficiencies in resource allocation. Studies indicate that this can lead to a persistent decline in GDP over several years.
• 
  
• Historical evidence: Major trade disputes throughout history, such as the 1930 Smoot-Hawley Tariff Act, show that tariffs take time to inflict their full economic damage. Even recent examples show that markets can recover relatively quickly from initial volatility, but the underlying trade war takes much longer to resolve, continuing to influence long-term trends in corporate earnings and supply chains.

Why no mention of the benefits the government receives by taking in these tariffs? Assumibg the government makes good use of thses funds, does this not affect the overall economy? If it's just a tax as some say then are you now admitting that increasing taxes is bad for the economy?

The most glaring problem is that countries would not retaliate with tariffs of Their Own if it was going to damage their economy. That makes no sense.

The acumen of these so called experts leaves a lot to be desired.

 

[Luckyone]

Why no mention of the benefits the government receives by taking in these tariffs? Assumibg the government makes good use of thses funds, does this not affect the overall economy? If it's just a tax as some say then are you now admitting that increasing taxes is bad for the economy?

The most glaring problem is that countries would not retaliate with tariffs of Their Own if it was going to damage their economy. That makes no sense.

The acumen of these so called experts leaves a lot to be desired.

From one of your own

 

[San Souci]

The market will eventually take a downturn and they will then claim they were correct. Even if it doesn't happen until Trump leaves office and a Democrat takes over(God forbid), they will blame the downturn on Trump and his tariffs. They can't ever admit they were wrong. It isn't in their DNA.

Dem DNA is lower than Java Man

 

[Andrew_Jackson_FTW]

Incredible market returns the past week or so. Under Trump we are doing pretty darn well.

Man ya gotta feel for the know at all people who claimed that the markets would fail under Trump. I mean, of course they said the same thing in 2016 and the markets perform better under Trump than they did under Biden. Under Biden in 2022 gave us the worst year we’ve had in the recent market economy.

Lol gotta love the know it alls

“ the tariffs are going to kill the market”

“Trumps a Nazi”

“Sell your stock”

I love that one sell your stock. They said that in 2016. Fast-forward 2018 “it’s just luck sell your stock.”

Fast-forward to 2025. “ well uh Trumps just lucky”

 

[Andrew_Jackson_FTW]