Prior Trading Day Summary
For the start of September, investors took profits and sent the S&P back to below the 21 days moving average. The index slipped to 6360 by the start of the lunch hour. Sellers though, found buyers ready to pick up shares and by the close, the S&P recovered much of the morning loss to close down 44 points to 6415. There were large swings on Tuesday which is common in an overbought market and for the month of September. September has a history of scary dips and pullbacks. Historically September tends to be worse than October although October has the dubious distinction of having more crashes than any other month. But while investors always worry about October, September actually has wiped out more gains than October, over the past 50 years.
The NASDAQ closed down 176 points to 21,279.
Overall Tuesday’s sell-off fed media outlets more than it hurt investors. This has been typical of the start of September for years.
Lets review the closing technical indicators from Tue Sep 2 2025 to see if the selling will continue, or whether as I suspect, we could see a bounce back on Wed Sep 3 2025.
Stock Market Outlook: SPX Closing Chart For Tue Sep 2 2025
The index closed just below the 21 day moving average. This is bearish.
The closing candlestick is bearish for Wednesday but also signals that a bounce is likely, especially in the morning.
The 21 day moving average is rising and closed at 6417 which is bullish.
The 50 day moving average is rising and closed at 6325 which is bullish.
The 100 day moving average is rising and closed at 6146 which is bullish.
The 200 day moving average is rising and closed at 5956 which is bullish.
The Lower Bollinger Band is turning higher while the Upper Bollinger Band is falling. The signs are that a Bollinger Bands Squeeze could be underway by Wednesday or Thursday. At present, the Bollinger Bands Squeeze is signaling stocks will move lower out of the latest squeeze, but it is early to predict the actual direction.
The SPX chart is more bearish than bullish for Wednesday.
SPX Stock Market Outlook review of Tue Sep 2 2025
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and negative.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Tue Aug 19 2025. On Tue Sep 2 2025 the down signal gained strength.
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Ultimate Oscillator: The Ultimate Oscillator is rising.
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Slow Stochastic: The Slow Stochastic has a down signal in place.
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Relative Strength Index: The RSI signal is falling.
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| Rate of Change: The rate of change signal is rising, signaling a higher close for Wed Sep 3 2025. Settings: Rate Of Change is set for a 21 period. This indicator looks back 21 days and compares price action from the past to the present. With the Rate Of Change, prices are rising when signals are positive. Conversely, prices are falling when signals are negative. As an advance rises, the Rate Of Change signal should also rise higher, otherwise the rally is suspect. A decline should see the Rate Of Change fall into negative signals. The more negative the signals the stronger the decline. |
Stock Market Outlook: Support and Resistance Levels |
| 6500 is resistance |
| 6470 is resistance |
| 6450 is resistance |
| 6425 is resistance |
| 6400 is resistance |
| 6390 is resistance |
| 6365 is resistance |
| 6350 is resistance |
| 6325 is resistance |
| 6300 is resistance |
| 6250 is resistance |
| 6225 is resistance |
| 6200 is support |
| 6175 is support |
| 6150 is support |
| 6125 is support |
| 6100 is support |
| 6075 is support |
| 6050 is support |
| 6025 is support |
| 6000 is support |
Stock Market Outlook for Wed Sep 3 2025
The technical indicators are more negative on Tuesday by the close. Often this signals a bounce is likely today, in the morning. The chance of a lower close is probably 50/50 today. Thursday will be a better day to tells us if the selling is dried up.
For Wednesday take your time placing trades and keep positions small just in case there is a better opportunity coming. For now though, the day looks like a bounce will occur in the morning and then stocks may drift lower into the close.
Potential Economic and Political Market Moving Events
Tuesday:
9:45 S&P final manufacturing PMI slipped below estimates to 53.0
10:00 ISM manufacturing rose to 48.7%, higher than estimated
10:00 Construction spending fell lower than estimated to -0.1%
Wednesday:
10:00 Job openings are estimated at 7.4 million
10:00 Factory orders are expected to rally to -1.3%
2:00 Fed Beige Book is released