EB Daily Market Report - Brief Update - Tuesday, August 19, 2025

It's DRAFT Day!

We will be hosting our Top 10 Stocks event, beginning at 5:30pm ET this afternoon.  Room instructions will be sent out in a separate email later today.

I'll be locked up in my "War Room" all day, but I wanted to get a quick note out this morning.  We're seeing very little volatility this week as our major indices started today very much like they ended yesterday - relatively flat.  The NASDAQ is showing a bit of relative weakness, while the Dow Jones exhibits relative strength.  The NASDAQ 100 ($NDX) is trading at 23498, just 90 points above its 20-day EMA.  That's the first key level of support, but certainly not the biggest.

The S&P 500 is trading at 6436, down fractionally this morning.  I view the biggest level of support on the S&P 500 to be price support at 6144.  If you recall, that was the all-time high close from February 19th, just before U.S. stocks fell into another cyclical bear market.  A test of that level would represent a pullback of roughly 5%.  I'm not calling for that type of drop, rather I'm simply saying that would be a key level if selling does kick in.  I view that to be a much bigger support level than the 20-day EMA.

While the action is mostly lower on the day, 9 of our 11 sector are actually higher.  Only technology (XLK, -0.94%) and communication services (XLC, -0.69%) are lower and that could very well be the result of options expiration week.  Stocks in uptrends that also are heavily traded in options are typically quite vulnerable the week of and during the early part of the week after monthly options expiration.  Semiconductors ($DJUSSC, -1.88%), software ($DJUSSW, 1.63%), and internet ($DJUSNS, -1.67%) are three industry groups that absolutely could be affected by options expiration and these three are dragging down our major indices.

I hope to see you later this afternoon for DRAFT Day!

Happy trading!

Tom