Technically Speaking – September

October 6, 2025

Long Term Resistance SP500:  6800

Long Term Support SP500:   6350 then 6200

September is historically the worst month of the years for the markets. However, this year, the markets continuously hit new all-time highs during the month. This was largely due to the Fed lowering interest rates by 25 basis points and hinting at more rate cuts in the near future. The Fed is still on the cautious side but decided it was time to cut rates for the first time in almost a year.

The lower rates initiated a surge of investors pouring money into small cap companies, particularly into companies that are in the artificial intelligence sector. Quantum companies have seen some of the largest gains in the last few weeks, with investors speculating that quantum is the next step in the AI revolution. The small cap companies that compliment the chip companies saw big increases as well. This aggressive rise in the markets has caused me to become cautiously optimistic for the time being. Stocks do not go straight up, and we will see a pullback eventually. How big will that pullback be? We do not know. It is not always bad to have a healthy market correction after a surge like we have just seen, but we are going into a historically bullish time of the year during the 2^nd half of the 4^th quarter. The S&P keeps climbing to new highs and the next resistance level is 6,800. If it blows past 6,800, we could see the S&P get to 7,000 before the end of the year.

If you are getting nervous about how much the markets have been bought recently, it might not be a bad idea to find areas to make profits and raise some cash. This is what I mean by being cautiously optimistic in this current market environment. Slowly raising some cash during this time can help protect from some downside risk while still being able to participate in the rally. If we do see a market correction, then that could be time to put the cash back to work.