August 2025 Cycle Forecasts
The stock market has shown notable resilience but may now be on the verge of a pullback. Our Market Timer Setup indicates that the Nasdaq 100 (NDX) has slipped below its 5-day SMA (black) as market breadth deteriorates. Both the Nasdaq 100 Stocks Above the 5 SMA (NDFI) and the 20 SMA (NDTW) are trending lower. Meanwhile, the VIX Curve (VXV/VIX) is turning down from an overbought condition, which historically favors downside. Lastly, the Put/Call ratio recently hit a low, signaling that retail traders—fueled by FOMO—are aggressively buying calls in anticipation of more upside. These late-stage buyers are often the first to get washed out, potentially setting the stage for a healthy reset before the next leg higher.
Dumb Money appears tapped out as Smart Money is at a low, ready to buy the upcoming dip.
The Fear and Greed Model is finally beginning to dip after grinding sideways in Extreme Greed for about 3 months.
The S&P 500 (SPY) is now trading below the 10 EMA (green) after finding resistance near the R2 Pivot Point. A test of the 21 EMA (yellow) around $626 is next. If that does not hold, the 50 EMA (red) could be the next point of support at $612. Notice red selling volume creeping in as Cumulative Volume Delta also succumbs to enthusiastic sellers. The Stochastics and RSI indicators are heading lower after a prolonged stay in the overbought territory.
The Nasdaq 100 (QQQ) is pretty much in the same situation.
The Russell 2000 (IWM) shows relative weakness as it already fell below the 21 EMA. The next stop could be the 50 EMA at $216 or the 200 EMA at $212.
The Dow Jones Industrial Average (DIA) also has relative weakness to the SPY. Look for it to test the 50 EMA at $435 or the 200 EMA at $424.
Early August tends to be a seasonally weak time for the stock market so be sure to tighten stops and raise cash to buy the upcoming dip.
In the Premium Section we’ll go over August 2025 Cycle Forecasts for our Main Asset Classes (SPY, QQQ, IWM, DIA, TLT, GLD, SLV, Oil and BTC).
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