Chart of the Day - Thursday, September 25, 2025

• The S&P 500 ($SPX) fell for the third straight day, but the pullback has been mild, slipping just -2% on an intraday basis and -1.3% on a closing basis. 
   
• Frank notes that short-term momentum swiftly corrected from extremely overbought levels on Monday to nearly oversold levels. Importantly, it didn't quite reach oversold today, indicating a resilient underlying bid. 
   
• Before pulling back, RSI confirmed the last all-time high on Monday, rather than diverging like it typically does before significant tops. However, immediate follow-through is necessary, and a potential oversold reading would suggest a deeper pullback than the previous ones.
   

The Takeaway: A -2% decline was all it took for short-term momentum to correct from extremely overbought levels to nearly oversold levels. It avoided oversold territory today, signaling resilience, but immediate follow-through is necessary, and a potential oversold reading would be a red flag.