By Contributor,Tom Aspray

Copyright forbes

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So what do 196 mostly bullish money managers with close to $500 million under management think about a stock market that continues to make new highs in one of the seasonally weakest months?

A recent article noted that in 2025, the S&P 500 had hit 28 all-time highs. The number of new all-time highs in September is at a record level that goes back to 2017. That was another year when the Wall Street strategists were too pessimistic on their year-end targets. According to Bloomberg, the median year-end forecast for 2017 was 2,178, but the S&P 500 closed at 2673, which was 22.7% above the median forecast.

The 2025 median target from late 2024 was at 6500, but many lowered their forecasts after the stock market’s decline this spring to just a 2% gain from the earlier 13% target. As the market rebounded sharply from the spring lows, several strategists started to raise their S&P 500 targets as well as their forecasts for S&P 500 earnings. According to Bloomberg, “Analysts now expect S&P 500 profits to grow 9.4% this year, up from 7.1% shortly after Labor Day.”

As is generally the case, the September Bofa Global Fund Manager Survey, which I have followed for many years, provides some interesting insights into how the 196 panelists they surveyed are positioned.

Many of the survey results reflect a bullish stock market outlook as their broadest measure of FMS sentiment “rose to 5.4 from 4.5, the highest level since February 2025. Growth expectations took their largest jump since October 2024.

On rate cuts, 59% expect either 2 or 3 rate cuts in the next 12 months (see chart). While only 6% expect higher short-term rates, those expecting higher inflation are now at 49% up from just 9% in September 2024. Seemingly contradictory views like this are occasionally evident in the monthly report.

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10-Year T-Note Yield
Tom Aspray – ViperReport.com

I have been looking for the 10-year T-note yield to move lower since July, when a weekly doji sell signal was triggered (line 1). This was supported by negative signals from the MACDs and MACD-His. Just four weeks ago, the yield closed below the support at line b.

The completion of the trading range, lines a and b, projected lower yields with next support at 3.886% and the weekly starc-band. There is further support in the 3.593% area and the April 2024 low. The declining 20-week EMA is at 4.264% and is consistent with the start of resistance. The technical outlook for the 2-year T-Note yield does look a bit more positive, but it has resistance starting in the 3.800% area.

Tom Aspray -ViperReport.com

The stock market was under pressure for much of the week as after Monday’s higher close, it was lower for the next three days before closing higher on Friday. For the week, the Dow Jones Utility Average was the best performer, up 2.3% as it has maintained a double-digit year-to-date gain (YTD). The SPDR Gold Share gained 2.2% and is up 43.2% YTD.

Last week, the majority of the averages were lower, even though they closed well above the week’s lows. The Dow Jones Transportation Average was up 0.8% for the week, while the weakest was the NYSE Composite, down 0.9% with a 0.5% drop for the Nasdaq 100. The S&P 500 was 0.3% lower for the week. Last week on the NYSE, there were 1092 issues advancing and 1724 declining.

S&P 500 With Advance/Decline Line
Tom Aspray – ViperReport.com

The S&P 500 (SPX) moved above its four-week highs in August as the yearly R1 at 6469 was overcome and now becomes support. The yearly R2 is at 6992. The 20-week EMA is rising strongly at 6301 and represents a positive trend. The weekly close above the yearly pivot at 5574 in April was a sign of a trend change.

The weekly S&P 500 Advance/Decline line has been declining for a few weeks, but is still rising and above its WMA. The monthly A/D lines are also positive. If you compare the levels of the S&P 500 and the A/D line, you can see why I was convinced during the heavy spring selling that it was not the start of a new bear market.

The S&P 500 reached a low, point b, at 4835, which correlated with the low in April-May of 2024. As the market was declining, the selling was less heavy as the A/D line held well above the corresponding lows, line c. This was a sign that the A/D line was not confirming the decline in the average, as if it was the A/D line should have reached line d. The daily S&P 500 A/D line, as well as those for the NYSE, did close back above their EMAs on Friday, and they are now back to positive.

S&P 500 With FMS Cash Level
Tom Aspray – ViperReport.com

The 21-page BofA survey always has some interesting data that is not always of a contrary nature. In August, I pointed out that the FMS cash level had generated a sell signal by declining to 3.9% in July.

It had risen to 4.8% at the April lows after reaching 3.5% at the February highs. The cash level was unchanged in the September report, and for me, higher levels in the 4.5-5% area, I think, are needed to help fuel a further rally.

In August 2024, the FMS Cash levels had risen slightly to 4.3% as the S&P 500 tested its 20-week EMA before it rebounded sharply. In October, the FMS cash had declined to 3.9% and as stocks were making new highs in January 2025, the FMS cash had declined even more 3.5%.

By looking at these cash levels along with the bull%-bear%, you can see that low cash levels often correspond to levels where this differential shows more bulls than bears, as there were 15% more in January. With last week’s bull% unchanged at 41.7% and the bear% declining to 39.2%, the bull%-bear% rose to 2.5%. I have been looking for a rally to the 10-20% area before I get more worried.

My outlook for the stock market is based on my monthly, weekly, and daily advance/decline analysis. For taking new or exiting existing positions, I use some traditional technical analysis along with the multi-time frame DTS or dynamic trading system signals developed by my colleague Jerry A.

Sector ETS With DTS Readings
Tom Aspray – ViperReport.com

This table includes all eleven ETFs that track the main sectors, along with SPX, QQQ, and IWM. Last week, XLB had the only new negative weekly DTS, while at the end of the week, XLV generated a negative 3_DTS, which is based on a three-day bar. The 3_DTS was already negative for XLB.

When an ETF has a negative DTS that is followed by a 3_DTS then I look closely at both the daily and weekly charts along with the technical indicators. These combined signals are often followed by negative WKS_DTS and further price weakness. This analysis is then used to determine whether I should be exiting the long position or just move the protective stop higher.

As the stock market is bottoming, you will typically see positive 4H_DTS that are followed by +DTS, which puts me on alert. Depending on the daily volume and relative performance analysis, trading longs may be established before a positive WKS is generated. The SPDR Fund Consumer Discretionary (XLY) generated a positive 4_DTS on Friday.

With Friday’s close, the stock market may have completed its correction, but it will take a couple of days of strong A/D numbers to confirm a rally back to or above the recent highs. Watch the numbers early in the week, as on Friday, 70% of the S&P 500 stocks closed positive.

Tom recently discussed the weekly technical outlook for BTCUSD on Forbes.com.

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