In the August 2025 edition of CAPIS’ Monthly Research Briefing, technical strategist Katie Stockton of Fairlead Strategies returned to share her latest views on U.S. equity market structure, macroeconomic signals, and tactical sector rotation. She delivers a detailed walkthrough of long-term and short-term technical indicators across equities, rates, commodities, FX, and digital assets — highlighting short-term caution signals and long-term bullish setups for Q4 and into 2026.
Below is an overview of the topics Katie hit during her session. If you’d like to learn more or watch the session, reach out to your CAPIS sales representative.
U.S. Market Momentum and Seasonal Trends for Q4 2025
S&P 500
The S&P 500 has fully recovered from earlier loss of momentum, with monthly MACD and stochastics turning higher. The breakout from June/July supports a long-term upside target.
Nasdaq 100
Despite the long-term strength, short-term indicators are showing fatigue, especially in mega-cap leadership. While the Nasdaq also broke out, relative performance has weakened recently. Stocks like Microsoft and Palantir show declining momentum, potentially supporting continued sector rotation.
Market Breadth, Volatility and Sentiment Shifts
Market Breadth
Despite mega-cap dominance, cumulative advance-decline lines confirm broader strength. Near-term momentum, however, points to choppier breadth ahead.
Volatility Index and Sentiment Extremes
The VIX is near key support, suggesting potential for a volatility spike. Stockton flags contrarian signals from extreme bullish sentiment (e.g., Fear & Greed Index).
Macroeconomic Signals: Rate Cuts and Global Equities
Historical View: Rate Cuts and Market Weakness
While rate cuts are often seen as bullish, Stockton cautions that they’ve historically coincided with corrections or bear markets.
Growth vs. Value Style Rotation
Large- and small-cap growth have begun underperforming, with momentum now favoring value stocks in the short term—though the long-term trend still favors growth.
International Equities Outlook: Japan and China
Relative performance vs. U.S. is improving; Japan’s Nikkei shows a major breakout with long-term upside. FXI ETF has completed a double bottom with breakout targets possibly achieved before year-end. Still, short-term setups matter due to China’s higher volatility.
Sector Rotation Trends and Tactical Positioning
Sector Rotation in 2025
2025 shows broader sector participation vs. 2024’s mega-cap-driven rally. Communications and tech remain top performers, though recent pullbacks warrant caution.
Highlights and Tactical Views
- Overweight: Communications, Utilities, Financials
- Neutral/Watching: Healthcare, Staples, Industrials
- Underweight: Energy, Real Estate, Materials
RRG Visualization
A long-term Relative Rotation Graph (RRG) shows tech falling out of favor—underperforming with declining momentum.
Commodities, FX, Bitcoin and Alternative Assets
Crude Oil
Crude remains in a cyclical downtrend. Key support near $60–$70 could spark a rebound, especially if WTI reclaims levels above the cloud by Q4.
Gold
Gold remains in a strong secular trend, consolidating between $3,285 and $3,450. A breakout above the range could target ~$3,760.
Dollar Index
The dollar has tested long-term trendline support. Short-term relief rally possible toward ~101.6–102, though the broader trend remains weak.
10-Year Treasury Yields
Yields remain range-bound between ~4.0% and ~4.74%. There’s potential for an upside breakout—counter to consensus expectations around rate cuts.
Bitcoin Consolidation
Following a breakout and new all-time high (~$108K), Bitcoin is consolidating. A measured move projects $134K–$135K by Q4 if support holds and momentum returns.
Q&A and Closing Remarks
Client Q&A
Katie takes questions from clients attending the MRB session, zeroing in on specific tickers such as Biotech (XBI), India (INDA) and Eli Lilly (LLY).
Looking Ahead
CAPIS’ Ed O’Dowd shares that the September call will feature Andi Kerenxhi, President of Ubineer, who will discuss AI-driven investment strategies. He confirms Katie will return for the November briefing, sharing updated technical insights.
If you’d like to learn more or watch Katie’s August session, reach out to your CAPIS sales representative.