EB Weekly Market Report - Monday, August 18, 2025

Tom Bowley - August 18, 2025

ChartLists/Spreadsheets Updated

The following ChartLists/Spreadsheets were updated over the weekend:

Strong Earnings (SECL)
Strong Future Earnings (SFECL)
Raised Guidance (RGCL)
Short Squeeze (SSCL)
Bullish Trifecta (BTCL)
Leading Stock (LSCL)
Upcoming Earnings and Upcoming Earnings Relative Strength

Due to the large number of earnings reports the past couple weeks, I’ve been unable to update the Key Manipulation Excel Spreadsheet that we normally update each week. I’ll have that caught up this week.

Weekly Market Recap

Major Indices

Sectors

Top 10 Industries Last Week

Bottom 10 Industries Last Week

Top 10 Stocks - S&P 500/NASDAQ 100

Bottom 10 Stocks - S&P 500/NASDAQ 100

Big Picture

Yes, it’s now mid-August and most quarterly earnings reports have come and gone. Today also marks the beginning of the 2^nd half of Q3. The 2^nd half of Q3 is the WORST half of any calendar quarter and the second worst isn’t very close. So seasonality tells us to lower the bar for U.S. stocks for the next 45 days – through September 30, 2025. I’m not looking for a major selloff, but I also am a student of history. While I certainly wouldn’t be shocked by a continuing advance, I believe the more likely scenario is consolidation ahead.

Stay the bullish course, despite weak seasonality.

Sustainability Ratios

Here's the latest look at our key intraday ratios as we follow where the money is traveling on an INTRADAY basis (ignoring gaps):

QQQ:SPY

For the most part, the market environment favors the risk-on QQQ vs. the more value-oriented SPY and that’s a good thing, in terms of a further market advance in 2025.

IWM:QQQ

The interesting part here is that the small cap IWM has been holding its own on an intraday relative basis vs. the QQQ. The chart above shows the multiple relative support tests, prior to the IWM:QQQ price jumping last week. While there hasn’t been a major rotation into small caps, there does still seem to be plenty of investors moving into small caps.

XLY:XLP

This is one of my favorite charts and it’s still painting a fairly bullish picture as we move into a seasonally-weak period.

Sentiment

5-day SMA ($CPCE)

Sentiment indicators are contrarian indicators. When they show extreme bullishness, we need to be a bit cautious and when they show extreme pessimism, it could be time to become much more aggressive. Major market bottoms are carved out when pessimism is at its absolute highest level.

Keep in mind that the above 5-day SMA reading of the CPCE is our "speed boat" sentiment indicator that changes quite frequently. The S&P 500 has set new all-time highs recently and the good news is that this short-term sentiment indicator is not overly complacent, sitting in neutral territory.

253-day SMA ($CPCE)

This longer-term 253-day SMA of the CPCE is our "ocean-liner" signal, unlike our short-term speedboat indicator. This one usually provides us a very solid long-term signal as the overall market environment moves from one of pessimism to complacency and vice versa. Look at the above chart. Nothing is changing here. When the 253-day SMA is moving lower like it is now, it accompanies our most bullish S&P 500 moves. I cannot think about being long-term bearish while this 253-day SMA keeps falling. Could we have a late-summer drift lower? Sure, but I doubt believe we're going to see any type of major selloff.

Long-Term Trade Setup

Since beginning this Weekly Market Report in September 2023, I've discussed the long-term trade candidates below that I really like. Generally, these stocks have excellent long-term track records, and many pay nice dividends that mostly grow every year. Only in specific cases (exceptions) would I consider a long-term entry into a stock that has a poor or limited long-term track record and/or pays no dividends. Below is a quick recap of how these stocks look as of a few weeks ago. I'll provide my next update on them next week:

JPM – consolidating the past several weeks, remains bullish
BA – currently in an uptrend,I’m expecting a move to 270-280
FFIV – is in all-time high territory
MA – same, in all-time high territory
GS – very bullish long-term chart, though somewhat overbought
FDX – trending below its 20-month EMA and 50-month SMA, needs to clear both to the upside
AAPL – recently discussed importance of RSI 50 on monthly chart, now back in uptrend
CHRW – huge July move higher, followed by more buying in August – to all-time highs
JBHT – remains in 2025 downtrend, I’m expecting April low to hold on any further weakness
STX - long-term breakout in May has sent stock soaring
HSY – has improved significantly, but needs to clear price resistance at 200
DIS – another on the improve, but needing a breakout above 125
MSCI – slow and steady advance, watch for 654 breakout level
SBUX - remains squarely in the middle of a wide consolidation range between roughly 70 and 115
KRE – remains in nice uptrend; should benefit from future rate cuts
ED – trading above its rising 20-month EMA
AJG – successfully testing its rising 20-month EMA
NSC – could be breaking out of long-term cup with handle, measuring to 380
RHI – very, very weak, with tons of price support at 30 and just below
ADM – clearing its 20-month EMA for first time in two years
BG – its primary short-term hurdle is clearing its declining 20-month EMA
CVS – move back above 75 is what the bulls would like to see
IPG – bouncing off 22.50 price support
HRL - the last 18 months have been spent in a fairly narrow 27-35 range
DE – dropped a bit with earnings recently, but remains in very bullish long-term uptrend

Keep in mind that our Weekly Market Reports favor those who are more interested in the long-term market picture. Therefore, the list of stocks above are stocks that we believe are safer (but nothing is ever 100% safe) to own with the long-term in mind. Nearly everything else we do at EarningsBeats.com favors short-term momentum trading, so I wanted to explain what we're doing with this list and why it's different.

Also, please keep in mind that I'm not a Registered Investment Advisor (and neither is EarningsBeats.com nor any of its employees) and am only providing (mostly) what I believe to be solid dividend-paying stocks for the long term. Companies periodically go through adjustments, new competition, restructuring, management changes, etc. that can have detrimental long-term impacts. Neither the stock price nor the dividend is ever guaranteed. I simply point out interesting stock candidates for longer-term investors. Do your due diligence and please consult with your financial advisor before making any purchases or sales of securities.

Looking Ahead

Upcoming Earnings

The following list of companies is NOT a list of all companies scheduled to report quarterly earnings, however, just key reports, so please be sure to check for earnings dates of any companies that you own. Any company in BOLD represents a stock in one of our portfolios and the amount in parenthesis represents the market capitalization of each company listed:

Monday: PANW ($116 billion)
Tuesday: HD ($399 billion), MDT ($118 billion), KEYS ($28 billion)
Wednesday: TJX ($149 billion), LOW ($142 billion), ADI ($117 billion)
Thursday: WMT ($805 billion), INTU ($198 billion), WDAY ($59 billion), ROST ($48 billion)
Friday: None

Key Economic Reports

Monday: August housing market index
Tuesday: July housing starts & building permits
Wednesday: FOMC minutes
Thursday: Initial jobless claims, August Philadelphia Fed manufacturing index, July existing home sales, July leading indicators
Friday: None

Historical Data

I'm a true stock market historian. I am absolutely PASSIONATE about studying stock market history to provide us more clues about likely stock market direction and potential sectors/industries/stocks to trade. While I don't use history as a primary indicator, I'm always very aware of it as a secondary indicator. I love it when history lines up with my technical signals, providing me with much more confidence to make particular trades.

Below you'll find the next two weeks of historical data and tendencies across the three key indices that I follow most closely. The percentage for each calendar day represents the annualized return for that day. An example of how this is calculated is reflected next to the first day under the S&P 500 and in parenthesis:

S&P 500 (since 1950)

Aug 18: -41.17% (Ex: cumulative gains = -8.63% over 53 trading days. -8.63% x 253/53 = -41.17%)
Aug 19: -45.08%
Aug 20: +55.11%
Aug 21: -8.46%
Aug 22: -6.00%
Aug 23: +14.15%
Aug 24: +3.37%
Aug 25: -20.66%
Aug 26: -3.76%
Aug 27: -2.74%
Aug 28: -9.17%
Aug 29: +32.11%
Aug 30: -22.73%
Aug 31: +9.88%

NASDAQ (since 1971)

Aug 18: -7.71%
Aug 19: -73.15%
Aug 20: +29.27%
Aug 21: -11.96%
Aug 22: +19.25%
Aug 23: +11.22%
Aug 24: +11.28%
Aug 25: +27.71%
Aug 26: +24.80%
Aug 27: +12.86%
Aug 28: -20.96%
Aug 29: +75.20%
Aug 30: -34.86%
Aug 31: +16.28%

Russell 2000 (since 1987)

Aug 18: +6.13%
Aug 19: -83.11%
Aug 20: +16.44%
Aug 21: +2.70%
Aug 22: +12.00%
Aug 23: -21.80%
Aug 24: +32.69%
Aug 25: +5.79%
Aug 26: +2.45%
Aug 27: +32.30%
Aug 28: +14.73%
Aug 29: +158.05%
Aug 30: -69.37%
Aug 31: +1.28%

The S&P 500 data dates back to 1950, while the NASDAQ and Russell 2000 information date back to 1971 and 1987, respectively.

Final Thoughts

Well, earnings season has mostly closed now for Q2 and they were, for the most part, quite strong. That helped to fuel U.S. stocks to new all-time highs. Growth stocks continue to lead value stocks and I find that quite comforting from a longer-term perspective. Therefore, while we could see short-term weakness at any time, I’m very likely to remain extremely bullish ahead of what I believe will be more record highs in Q4. This is what I’m thinking about as we start the second half of Q3:

Earnings. As I mentioned, they’re mostly over. However, we now have over 500 charts on our Raised Guidance ChartList (RGCL), so many companies are quite bullish about Q3 and Q4 prospects, something to keep in mind
Inflation and The Fed. Fed Chief Powell will be speaking from Jackson Hole on Friday and there’s no doubt that all eyes will be on what he has to say after that VERY HOT July PPI report last week. The stock market has taken it in stride, but will Powell nix a potential rate cut at the September Fed meeting? That could really disappoint Wall Street as many are now expecting a September rate cut.
Options Expiration. August monthly options expired on Friday, but there’s still an impact on trading the following week as many options holders exercise their right to buy or sell the underlying securities at their strike prices.

Happy trading!

Tom