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Friday, August 29, 2025

PCE Inflation ... Chicago PMI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.” - Peter Lynch, former manager of Fidelity’s Magellan® fund.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

NO RED FLAGS RAISED (NBC News)
“More than seven years before Robin Westman opened fire on a Catholic school as Mass was underway, killing two children and injuring 17 more worshippers, police were called to a townhouse in the Twin Cities suburb where she lived with her mother. The heavily redacted police report NBC News obtained from the police department in Eagan, Minnesota, is dated Jan. 26, 2018, and it includes a two-word description explaining why an officer was dispatched to that address: mental health... Minnesota has a red flag law that went into effect in January 2024, allowing family members and others to petition the courts to have guns removed from a person they believe poses a threat to themselves or the community.”
https://www.nbcnews.com/news/us-news/investigators-say-no-red-flags-raised-minneapolis-church-shooter-rcna227856
My cmt: WTF?! They made a mental health call, but no one ever tried to place him on a no-gun list? The law didn’t exist when police made the mental health check. I guess he slipped thru the cracks.

VIRGINIA’S RED FLAG LAW
Virginia's "red flag" law, officially known as the Emergency Substantial Risk Order (ESRO) law, restricts firearm ownership by allowing courts to issue an order for the temporary removal of firearms from an individual deemed by a court to be a substantial risk to themselves or others.

“Virginia’s Emergency Substantial Risk Order (ESRO) law, commonly known as a Red Flag law, prevents individuals who show signs of being a threat to themselves or others from purchasing, possessing, or transporting any kind of firearm. ESROs also provide necessary procedural safeguards to ensure that no firearm is removed without due process, while ensuring that gun tragedies are not repeated. Fairfax County Police Domestic Violence Detective Amanda Paris says that the Red Flag Law is a great tool to help keep the community safe. “Not only does it give time for the person on the order to go ahead and seek the treatment and the help that they need, but it also allows the community to feel safer by having those weapons temporarily removed... [In Virginia, anyone can request an emergency order.] To request an ESRO, call the Police non-emergency line at 703-691-2131. If there is an immediate danger, call or text 9-1-1.” From...
https://www.fairfaxcounty.gov/news/red-flag-law
My cmt: Minnesota’s law is similar (passed in 2023), but it didn’t work in Minneapolis – no one reported Robin (Robert) Westman. He/she bought several weapons legally in August, shortly before he/she murdered 2 children and wounded many others in a church.

PCE / CORE PCE (CNBC)
“The personal consumption expenditures price index showed that core inflation, which excludes food and energy costs, ran at a 2.9% seasonally adjusted annual rate... On a monthly basis, the core PCE index increased 0.3%, also in line with expectations. The all-items index showed the annual rate at 2.6% and the monthly gain at 0.2%, also hitting the consensus outlook.” Story at...
https://www.cnbc.com/2025/08/29/pce-inflation-report-july-2025.html

CHICAGO PMI (Advisor Perspectives)
“The Chicago Purchasing Managers’ Index (Chicago Business Barometer) slowed in August, reversing most of the gains seen in July. The index fell 5.6 points to 41.5, the largest monthly decline since December 2023. The latest reading marked the 21st consecutive month of contraction for the index and was below the forecast of 46.6.” Commentary, charts and analysis at...
https://www.advisorperspectives.com/dshort/updates/2025/08/29/chicago-pmi-contracts-for-21st-consecutive-month

MARKET REPORT / ANALYSIS
-Friday the S&P 500 declined about 0.6% to 6460.
-VIX rose about 6% to 15.36.
-The yield on the 10-year Treasury rose to 4.232% (compared to about this time prior market day).

MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 6 gave Bear-signs and 16 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators declined from +10 to +4 (4 more Bull indicators than Bear indicators) and is now giving a Neutral indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread continued down – a bearish sign.

Indicators dropped to a Neutral position, but there are still 13 Bull indicators so a major crash is not indicated now. It could always happen – PEs are elevated/sentiment is high – but indicators don’t suggest it yet.

The biggest concern is that all of the ETFs that I track for momentum purposes are above their respective 120-dMAs. That signals a top, but declines following the signal are often small, and the signal can be early. There are encouraging signs. A couple of important ones:
We note that the S&P 500 has not dropped below its lower trendline and it is 2.3% above its 50-dMA; the Fosback, 10-dMA Hi/Lo Logic Index is well to the bull-side; Breadth readings are good; the McClellan Oscillator is positive.

Regarding the McClellan Oscillator: “The McClellan Oscillator offers many types of structures for interpretation, but there are two main ones. First, when the Oscillator is positive, it generally portrays money coming into the market; conversely, when it is negative, it reflects money leaving the market. Second, when the Oscillator reaches extreme readings, it can reflect an overbought or oversold condition.” – From McClellan Financial Publications at...
https://www.mcoscillator.com/learning_center/kb/mcclellan_oscillator/the_mcclellan_oscillator_summation_index/

The most likely interpretation is that this decline over the last 5-days or so (the Index is now slightly below where it was 5-days ago) may just be a return to the lower trendline.

BOTTOM LINE
I remain cautiously bullish to neutral.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html

DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)

The top ranked Stock receives 100%. The rest are then ranked based on their momentum relative to the leading Stock.
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html

FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained HOLD. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

My current invested position is about 50% stocks, including stock mutual funds and ETFs. 50% invested in stocks is a normal, conservative position for a retiree. (75% is my max stock allocation when I am confident that markets will continue higher; 30% in stocks is my Bear market position.)

I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, I add a lot more stocks to the portfolio, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.

Thursday, August 28, 2025

GDP ... Jobless Claims ... KC Fed Manufacturing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.” - Peter Lynch, former manager of Fidelity’s Magellan® fund.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

FUTILE EFFORTS TO BALANCE THE BUDGET (WSJ Letters)
“Sen. Ron Johnson (R., Wis.) deserves credit for pushing the government to return to its “pre-pandemic level of spending” (“Why I Won’t Give Up on Balancing the Budget,” Letters, Aug. 21). But any effort to review the federal budget “excluding Social Security and Medicare” is worthless. There is no hope for fiscal sustainability without reforming both programs.
Along with Medicaid, Social Security and Medicare are the largest drivers of our structural deficits. As every policymaker in Washington knows, mandatory spending on these entitlements consumes two-thirds of the budget. There isn’t enough to trim in the remaining third of discretionary spending to make a difference.
It gets worse. Estimates of the present-value costs of these programs range between roughly $100 and $200 trillion. In other words: Uncle Sam is currently in the red to the tune of one to two times the world’s gross domestic product.
Pledging to go after “waste, fraud and abuse” in discretionary spending polls well. But given the magnitude of unfunded entitlement liabilities, it amounts to rearranging deck chairs on the Titanic.” - Alexander William Salter, Professor,Texas Tech University

GDP (Quartz)
“Real gross domestic product rose at an annual rate of 3.3% in the second quarter of this year — accounting for April, May, and June — according to the U.S. Bureau of Economic Analysis’ second estimate of the quarter released Thursday.” Story at...
https://qz.com/us-economy-grew-second-quarter-2025-gdp

JOBLESS CLAIMS (WSJ)
“Downward revisions to hiring stats earlier this month dramatically darkened economists' views of the labor market. But other data continue to suggest there hasn't been a big rise in layoffs. Last week, just over 191,000 Americans initiated unemployment benefits, the Labor Department said Thursday. That's roughly the same level as during the same August week of 2024 and 2023.” Story at...
https://www.wsj.com/livecoverage/stock-market-today-dow-sp-500-nasdaq-08-28-2025/card/jobless-claims-data-have-been-reassuring-haMWXpmtJrmHbGhPDkil?gaa_at=eafs&gaa_n=ASWzDAhWCeeDAqV67wSE9vjV3GG0E-ez7dENMg3XcyrdDBUd5D2a-LiZzMA0SUj3N-8%3D&gaa_ts=68b0950b&gaa_sig=q4jhpldoMzREKCMCtoUhmX-1BrBnnmqPiCMX38DummJFodkhQM-jITpfpHosm9RUB5XvqJ2qDOYASQEGmHagPQ%3D%3D

KC FED MANUFACTURING (Advisor Perspectives)
“The Kansas City Fed Manufacturing Survey revealed regional activity was mostly unchanged in August, with the composite index remaining at 1 [expansion]. This is the highest level for the index since September 2022. Meanwhile, future expectations hit a six month high, rising from 8 in July to 11 in August.” Commentary at...
https://www.advisorperspectives.com/dshort/updates/2025/08/28/kansas-city-fed-manufacturing-activity-mostly-unchanged-august-2025

MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.3% to 6502.
-VIX declined about 3% to 14.43.
-The yield on the 10-year Treasury declined to 4.211% (compared to about this time prior market day).

MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 6 gave Bear-signs and 16 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators improved from +8 to +10 (10 more Bull indicators than Bear indicators) and is now giving a Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread continued down – a bearish sign.

This post looks a lot like yesterday:
On Thursday there was a new all-time high for the S&P 500. At all-time highs, I always check breadth on the NYSE. When we look at New, 52-week highs, we see that around 5.5% of issues on the NYSE made new 52-week highs today. That number is ok, but below the 5-year average of about 7%. 53.4% of issues on the NYSE have been up over the last 2-weeks. Like yesterday, the take-away here is that breadth is not sending a warning signal although we’d like to see it higher.

One signal that we rarely see is the Fosback, 10-dMA Hi/Lo Logic Index. It is still close to issuing a buy-signal, although it is not there yet. The 5-day version of this indicator remains bullish.

All of the ETFs that I track and chart for momentum purposes are once again above their respective 120-dMAs. That warning is a good one, but declines following the signal are often small and the signal can be early.

The Buying-Pressure minus Selling Pressure indicator developed (I think) by Lowry Research turned Bullish today. I say, “I think” because I’ve never seen this indicator explained by Lowry Research. The version I use is based on explanations of the indicator by others. It’s only one indicator, but bullish is the majority now, so good news.

BOTTOM LINE
I remain cautiously bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained HOLD. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

My current invested position is about 50% stocks, including stock mutual funds and ETFs.
50% invested in stocks is a normal, conservative position for a retiree. (75% is my max stock allocation when I am confident that markets will continue higher; 30% in stocks is my Bear market position.)

I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, I add a lot more stocks to the portfolio, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.

Wednesday, August 27, 2025

Crude Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“Increased vehicle efficiency has offset increased driving activity, measured as vehicle miles traveled (VMT). U.S. VMT reached an all-time high in 2024, at 9.0 billion miles per day, which was higher than the 2016–19 average of 8.8 billion VMT/d. However, increased fuel efficiency and electrification of the vehicle fleet has resulted in less gasoline consumption despite increased driving activity... In 2024, data from the Bureau of Transportation Statistics indicate the number of passengers and the available seat miles, a measure of aircraft carrying capacity, both increased from 2019, although the total number of flights decreased. Efficiency gains and changing flight patterns, among other factors, have contributed to jet fuel consumption remaining slightly lower than pre-pandemic levels.” From...
https://www.eia.gov/todayinenergy/detail.php?id=66005
My cmt: Interesting, but not market moving. If EIA is correct, the slowdown in fuel use is not related to declines in economic activity.

CRUDE INVENTORY (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.4 million barrels from the previous week. At 418.3 million barrels, U.S. crude oil inventories are about 6% below the five-year average for this time of year.” Press release at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf

MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.2% to 6466.
-VIX rose about 2% to 14.62.
-The yield on the 10-year Treasury declined to 4.238% (compared to about this time prior market day).

MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 7 gave Bear-signs and 15 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators declined from +13 to +8 (8 more Bull indicators than Bear indicators) and is still giving a Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread reversed down – a bearish sign.

On Wednesday there was a new all-time high for the S&P 500. At all-time highs, I always check breadth on the NYSE. When we look at New, 52-week highs, we see that around 5% of issues on the NYSE made new 52-week highs today. That number is ok, but below the 5-year average of about 7%. 51% of issues on the NYSE have been up over the last 2-weeks. The take-away here is that breadth is not sending a warning signal although we’d like to see it higher.

One signal that we rarely see is the Fosback, 10-dMA Hi/Lo Logic Index. It is close to issuing a buy-signal, although it is not there yet. The 5-day version of this indicator is already bullish.

All of the ETFs that I track and chart for momentum purposes are once again above their respective 120-dMAs and that is a bearish signal. That warning is a good one but declines following the signal are often small.

NVIDIA reported earnings today.
“Nvidia reported $46.7 billion in revenue for Q2 2026, beating expectations despite a 2% drop in shares post-earnings due to concerns over data center revenue. The company's strong forecast of $54 billion for Q3 highlights continued demand for AI chips, although uncertainty in China remains a concern.” From...
https://finance.yahoo.com/quote/NVDA/
Not great, but perhaps good enough so we won’t see too much market reaction tomorrow.

BOTTOM LINE
I’m cautiously bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals declined to HOLD. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

My current invested position is about 50% stocks, including stock mutual funds and ETFs.
50% invested in stocks is a normal, conservative position for a retiree. (75% is my max stock allocation when I am confident that markets will continue higher; 30% in stocks is my Bear market position.)

I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, I add a lot more stocks to the portfolio, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.

Tuesday, August 26, 2025

Durable Goods ... Consumer Confidence ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.” - Peter Lynch, former manager of Fidelity’s Magellan® fund.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

TRUMP REMOVING FED GOVERNOR (NBC News)
“President Donald Trump is removing Federal Reserve Governor Lisa Cook effective immediately, according to a letter he posted to Truth Social on Monday night. In the letter, Trump writes: "Pursuant to my authority under Article II of the Constitution of the United States and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately... Cook has not been charged with any crime, and her removal is likely to lead to a court battle between the independent central bank and the executive branch." Story at...
https://www.nbcnews.com/politics/white-house/trump-removing-federal-reserve-governor-lisa-cook-rcna227138
My cmt: The administration is charging her with mortgage fraud for having multiple primary residences, but that may be a "so what?" I heard a CPA on a local radio talk show. He noted that it is very common for home owners to have multiple “primary residences” on file. If you bought a house as your primary residence and then rented that house while moving to a new “primary residence” one would have more than one primary residence on record.

DEBT GOING UP (FOX Business)
“The U.S. government's budget deficits are now projected to worsen throughout the next decade when compared with earlier forecasts this year, according to a new report by the nonpartisan Committee for a Responsible Federal Budget (CRFB)... Under the updated baseline, CRFB projects that the national debt held by the public will rise from about 100% of gross domestic product (GDP) in 2025 to 120% of GDP by 2035. In dollar terms, that would see the debt held by the public rise from $30 trillion today to $53 trillion in 2035.” Story at...
US debt set to surge to 120% of GDP as federal deficits spiral over next decade under new projections
My cmt: Half-million owed by every taxpayer in 10-years...could be a problem!

DURABLE GOODS (baha breaking news)
“Durable goods orders in the United States were down by 2.8% in July month-to-month to $302.8 billion, the US Census Bureau revealed in its report on Tuesday. The figure exceeded the analysts' expectations by 1%.” Story at...
https://breakingthenews.net/Article/US-durable-goods-down-by-2.8-in-July/64709924

CONSUMER CONFIDENCE (Conference Board via prnewswire)
“The Conference Board Consumer Confidence Index® fell by 1.3 points in August to 97.4 (1985=100), down from 98.7 in July (revised up by 1.5 points).... "Consumer confidence dipped slightly in August but remained at a level similar to those of the past three months," said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board... "Consumers' write-in responses showed that references to tariffs increased somewhat and continued to be associated with concerns about higher prices. Meanwhile, references to high prices and inflation, including food and groceries, rose again in August. Consumers' average 12-month inflation expectations picked up after three consecutive months of easing and reached 6.2% in August—up from 5.7% in July but still below the April peak of 7.0%." Press release at...
https://www.prnewswire.com/news-releases/us-consumer-confidence-little-changed-in-august-302538912.html

MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.4% to 6466.
-VIX declined about 1% to 14.62.
-The yield on the 10-year Treasury declined to 4.265% (compared to about this time prior market day).

MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 4 gave Bear-signs and 17 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators improved from +8 to +13 (13 more Bull indicators than Bear indicators) and is now giving a Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is rising – also a bullish sign.

Tuesday, there was a Bullish outside reversal day.
From Investopedia:
“An outside reversal is a price pattern that indicates a potential change in trend on a price chart. The two-day pattern is observed when a security’s high and low prices for the day exceed the high and low of the previous day’s trading session. Outside reversal is also known as either a bullish engulfing (after a downward price move) or a bearish engulfing pattern (after an upward price move) when observed on candlestick charts... a stock may make a small move lower on the first day, then open even lower than the prior day, but rally sharply higher by the end of the second day. The indication is that bears had control over the market, but then bulls took over and overwhelmed them, signifying a change in the prevailing trend.”
https://www.investopedia.com/terms/o/outsidereversal.asp

I’ve been concerned that all of the ETFs that I track and chart for momentum purposes have been above their respective 120-dMAs. That warning ended today.

I added to stock holdings to get back to my fully invested position.

BOTTOM LINE
I’m cautiously bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

My current invested position is about 50% stocks, including stock mutual funds and ETFs.
50% invested in stocks is a normal, conservative position for a retiree. (75% is my max stock allocation when I am confident that markets will continue higher; 30% in stocks is my Bear market position.)

I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, I add a lot more stocks to the portfolio, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.

ADDING TO STOCK HOLDINGS

I bumped my stock holding in the portfolio up to roughly 50%. I added SPY and XLK. For me this is "fully invested" (as a retiree). I am not inclined to take on additional risk at this juncture.

Monday, August 25, 2025

National Activity Index ... New Home Sales ... Dallas Fed Manufacturing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.” - Peter Lynch, former manager of Fidelity’s Magellan® fund.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

"She [Ghislaine Maxwell] might as well have taken out Donald Trump, or President Trump, and said, 'The man who can pardon me has never done anything wrong. The man who can pardon me has always been wonderful...I don't think Donald Trump had anything to do with Jeffrey Epstein that was untoward or illegal,’ but we're going to believe Ghislaine Maxwell?" - Chris Christie, Former New Jersey Gov.

TRUMP’S VENDETTA (WSJ)
“President Trump promised voters during his campaign for a second term that he had bigger things on his mind than retribution against opponents. But it is increasingly clear that vengeance is a large part, maybe the largest part, of how he will define success in his second term... Kash Patel, the FBI director, sent out a cryptic tweet at 7:03 Friday morning that “NO ONE is above the law . . . @FBI agents on mission.” He didn’t specify to whom he was referring, but the timing is unlikely to have been coincidental. It’s hard to see the raid as anything other than vindictive. Mr. Bolton fell out of Mr. Trump’s favor in the first term and then wrote a book about his experience in the White House while Mr. Trump was still President... The real offender here is a President who seems to think he can use the powers of his office to run vendettas. We said this was one of the risks of a second Trump term, and it’s turning out to be worse than we imagined.” The Editorial Board, WSJ. Commentary at...
https://www.wsj.com/opinion/john-bolton-fbi-kash-patel-donald-trump-f44e7756?mod=opinion_lead_pos2
My cmt: The Wall Street Journal is a conservative newspaper. When the conservatives turn on Trump (and I’m one of them), it’s really bad.
.
THE IVY LEAGUE IS FAILING BASIC INVESTING (WSJ)
“Why does the smart money keep flunking Investing 101? During the 2008-09 global financial crisis, many of the world’s biggest investors [University endowment funds] found themselves in dire need of cash because they had sunk too much money into assets that couldn’t be publicly traded... On average, in fiscal 2024, educational endowments with more than $5 billion in assets held only 2% in cash, 6% in bonds, 8% in U.S. stocks and 16% in international stocks, according to the National Association of College and University Business Officers. That left two-thirds of their total holdings in private funds and other non-traditional assets that can’t readily be turned into cash... “They’re not as smart as they look,” Siegel [Laurence Siegel, 2007 research director for the Ford Foundation’s endowment] said, “because they’re human, and humans are quite closely related by evolution to monkeys.” Don’t be a monkey. Don’t put a penny into alternatives that you can’t afford to have locked up when you suddenly need cash.” Jason Zweig. Commentary at...
https://www.wsj.com/finance/investing/the-ivy-league-keeps-failing-this-basic-investing-test-747c8b8c?gaa_at=eafs&gaa_n=ASWzDAgWSiGbE3C-nBRlt3Kr1uPeanrfbuioZpzhbBklWEbqk-Qe2PLl8qYIjRX-prI%3D&gaa_ts=68ab75dc&gaa_sig=AveeE8ORIske6Ez9fm_wh7-hMmkbDX9o442cpf6LkNSlQScVvWMam_0KIaAJGPHUrsVgQIlIAUZ4T9lbwZxI_A%3D%3D

NATIONAL ACTIVITY INDEX (Seeking Alpha)
“July Chicago Fed National Activity Index ("CFNAI"): -0.19 vs. -0.18 in June (revised from -0.10), reflecting deteriorating production and sales, orders, and inventories indicators that weren't quite as bad as the prior month, the Federal Reserve Bank of Chicago said on Monday.” Story at...
https://seekingalpha.com/news/4488695-chicago-fed-national-activity-index-ticks-down-in-july

NEW HOME SALES (Realtor.com)
“Sales of newly built homes dropped in July, as price cuts and homebuilder incentives failed to lure buyers struggling with affordability. Signed contracts for new single-family homes were at a seasonally adjusted annual rate of 652,000 last month, down 8.2% from a year earlier, the U.S. Census Bureau and Department of Housing and Urban Development reported on Tuesday.” Story at...
https://www.realtor.com/news/real-estate-news/new-home-sales-census-report-july-2025/

DALLAS FED MANUFACTURING (Dallas FED)
“Texas factory activity continued to expand in August, according to business executives responding to the Texas Manufacturing Outlook Survey... Price and wage pressures picked up slightly. The raw materials prices index edged up to 43.7, well above its average reading of 27.4. The finished goods prices index moved up four points to 15.1, also an elevated reading. The wages and benefits index remained lower than average but inched up to 15.4.” Press release at...
https://www.dallasfed.org/research/surveys/tmos/2025/2508

MARKET REPORT / ANALYSIS
-Monday the S&P 500 declined about 0.4% to 6439.
-VIX rose about 4% to 14.79.
-The yield on the 10-year Treasury rose to 4.277% (compared to about this time prior market day).

MY TRADING POSITIONS:
None

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 7 gave Bear-signs and 15 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators declined from +11 to +8 (11 more Bull indicators than Bear indicators) and is now giving a Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is solidly rising – a bullish sign.

We didn’t get follow-thru buying today after Friday’s big move higher. That’s not too surprising since some profit taking would be normal. If the buying had continued it would have been bullish sign.

I think markets go higher from here and indicators are suggesting it. I mentioned the big, bear-warning we got last week, and I’ll repeat it here:
All of the ETFs that I track and chart for momentum purposes are above their respective 120-dMAs. This indicator almost always correctly identifies tops and bottoms, although the timing can be early. The most recent signals were: It called a bottom the day before the bottom of the 19% correction in April of 2025 when 100% of the ETFs were below their 120-dMAs. It was 2-weeks early when it warned at the top before a small 3% decline in Oct 2024. It warned the day before the top of a 9% correction in August 2024.

The declines associated with this indicator are sometimes small, so I won’t get too worked up over it yet.

Sentiment is elevated too. I measure Sentiment as a 5-day average of %-Bulls (Bulls/{bulls+bears}) based on the amounts invested in selected Rydex/Guggenheim mutual funds. Sentiment is now 97%-bulls. This is very high, but not yet giving a sell-signal. Sentiment is not a great timing tool, but it set’s the stage for declines when (and if) it reaches the sell level.

I was too busy to do anything today, but upping stock holdings seems advisable for me. I don’t want to be below 50% invested in stocks unless indicators are worse than where they are now.

BOTTOM LINE
I’m cautiously bullish. I’ll probably add some stocks Tuesday to get back to my “fully” invested position of 50% in stocks.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

My current invested position is about 40% stocks, including stock mutual funds and ETFs.
50% invested in stocks is a normal, conservative position for a retiree. (75% is my max stock allocation when I am confident that markets will continue higher; 30% in stocks is my Bear market position.)

I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, I add a lot more stocks to the portfolio, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.

Friday, August 22, 2025

Jackson Hole Speech ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.” - Peter Lynch, former manager of Fidelity’s Magellan® fund.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

US TAKES 10% STAKE IN INTEL (NBC)
“The Trump administration said Friday that it had taken a 10% [valued at roughly $10-billion] stake in Intel, President Donald Trump’s latest extraordinary move to exert federal government control over private business.” Story at...
https://www.nbcnews.com/business/business-news/intel-agrees-us-stake-in-company-how-much-what-to-know-rcna226667
My cmt: It appears that the Government had already given $10-billion to Intel in Chips Act and other funds from the Biden Administration. There was no new money, but Intel has agreed to grant the Government a 10% stake, although the funds had already been committed before the announcement. It is not clear where the shares come from. Will new shares be issued? If so, it would be dilutive to shareholders.

TRUMP TO FIRE FED GOVERNOR LISA COOK (CNBC)
“President Donald Trump said Friday he will fire Federal Reserve Governor Lisa Cook if she does not resign from her position...Federal Housing Finance Agency Director Bill Pulte this week publicly accused Cook of mortgage fraud related to claims that she took two different properties as her primary residence at the same time.”
https://www.cnbc.com/2025/08/22/trump-fire-fed-lisa-cook-powell.html
My cmt: How ironic. Trump ignores due process while he rails against “lawfare” against him by the Democrats.

JACKSON HOLE SPEECH EXCERPT (from CNBC)
“...Putting the pieces together, what are the implications for monetary policy? In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside—a challenging situation. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate. Our policy rate is now 100 basis points closer to neutral than it was a year ago, and the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance. Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” – Jay Powell, Chairman of the Federal Reserve.

JACKSON HOLE SPEECH (CNBC)
“Federal Reserve Chair Jerome Powell on Friday gave a tepid indication of possible interest rate cuts ahead as he noted a high level of uncertainty that is making the job difficult for monetary policymakers...” Story at...
https://www.cnbc.com/2025/08/22/powell-indicates-conditions-may-warrant-interest-rate-cuts-as-fed-proceeds-carefully.html

WARNING SHOTS BEFORE A MEANINGFUL PULLBACK (MarketWatch)
“Chris Watling, the CEO, global economist and chief market strategist at Longview Economics, is wary about the signals U.S. equities are giving going into the traditionally dodgy September period... Next, he says signs of froth have continued to build in recent weeks. For example, the percentage of stocks with valuations greater than 10 times enterprise value to sales is over 20%, similar to peaks in 2000 and 2021.. given all the flashing signals noted, he remains what he calls “tactically neutral” on U.S. stocks.” Story at...
Take heed of the latest market wobble. ‘You get warning shots before meaningful pullbacks,’ says this strategist.

MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 1.5% to 6465.
-VIX fell about 14% to 14.22.
-The yield on the 10-year Treasury declined to 4.256% (compared to about this time prior market day).

MY TRADING POSITIONS:
None

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 6 gave Bear-signs and 18 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)
TO

daily, bull-bear spread of 50-indicators jumped from -8 to +12 (12 more Bull indicators than Bear indicators) and is now giving a Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is solidly rising – a bullish sign. The 10-day did not turn bearish recently so it was the better signal.

While Powell’s comments were a [per CNBC] “tepid indication of possible interest rate cuts,” it was enough for the market. I was wrong on this one even though another Fed Governor came out more or less against rate cuts given the current data:
“Cleveland Federal Reserve President Beth Hammack said Friday she would be hesitant about lowering interest rates as long as inflation remains a threat. In a CNBC interview, the policymaker did not share the market’s enthusiasm for a cut, sparked after Chair Jerome Powell’s keynote speech earlier in the morning...” from CNBC at...
https://www.cnbc.com/2025/08/22/cleveland-feds-hammack-casts-doubt-on-interest-rate-cuts-amid-inflation-worries.html
Curious that Fed Governors are not in line with the Fed Chair.

Friday was a 90% up-volume day. Slightly more than 90% of all volume on the NYSE was up-volume. While we always like to see a 90% up-volume day, one 90% up-volume day by itself is not evidence of a sustained upside reversal. However, there were plenty of other bullish signs.
Two important ones:
-The S&P 500 bounced off its lower trend line, although the lower trendline is higher than “normal”. Usually, the lower trendline coincides with the 50-dMA.
-Clearly, there was a big, jump higher in indicators and that’s a solidly bullish sign.
But not all the news was good today.

Today, Friday, was a statistically significant up-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up-day is followed by a down-day about 60% of the time. Tops almost always occur on Statistically-significant, up-days, but not all statistically-significant, up-days occur at tops. There was also one very reliable indicator warning of a top.

As of Thursday, all of the ETFs that I track and chart for momentum purposes are above their respective 120-dMAs. This indicator almost always correctly identifies tops and bottoms, although the timing can be early. The most recent signals were: It called a bottom the day before the bottom of the 19% correction in April of 2025 when 100% of the ETFs were below their 120-dMAs. It was 2-weeks early when it warned at the top before a small 3% decline in Oct 2024. It warned the day before the top of a 9% correction in August 2024.

The market was bullish today, but we’ll need to be careful that we don’t get sucked into making huge buys at a top.
Should we buy Monday? It would seem so. Let’s see if we get follow-thru buying on Monday.

BOTTOM LINE
I’m cautiously bullish. I’ll probably add some stocks Monday to get back to my “fully” invested position of 50% in stocks.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals improved to BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)