“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
“What I call Ferguson’s Law states that any great power that spends more on debt service than on defense risks ceasing to be a great power. The insight is not mine but originates with the Scottish political theorist Adam Ferguson, whose “Essay on the History of Civil Society” (1767) brilliantly identified the perils of excessive public debt... The crucial threshold is the point where debt service exceeds defense spending, after which the centripetal forces of the aggregate debt burden tend to pull apart the geopolitical grip of a great power, leaving it vulnerable to military challenge. The striking thing is that, for the first time in nearly a century, the U.S. began violating Ferguson’s Law last year. Annual defense spending—to be precise, national defense consumption expenditures and gross investment—was $1.107 trillion in 2024, according to the Bureau of Economic Analysis (BEA), while federal expenditure on interest payments (the government long ago gave up on paying down principal) topped out at $1.124 trillion....
... History suggests that any sustained period when a great power spends more on interest payments than on military capabilities is likely to see its strategic rivals challenge its position.” - Niall Ferguson, Milbank Family Senior Fellow at the Hoover Institution at Stanford University and founder of the advisory firm Greenmantle.
My cmt: The piece suggests that Hitler attacked Britain when Britain violated Ferguson’s Law.
https://www.wsj.com/politics/policy/debt-has-always-been-the-ruinof-great-powers-is-the-u-s-next-02f16402
“The Trump administration has laid off tens of thousands of federal employees in an effort to save taxpayers money, but the government will still have to pay for these terminated employees' unemployment benefits, which could total billions of dollars. The White House is seeking to cut 10% of the federal workforce, having issued a request to cut all probationary employees, which could affect approximately 280,000 employees who’ve been employed for less than two years by the federal government.” Story at...
Trump mass layoffs could cost government billions of dollars in unemployment benefits
My cmt: I worked my entire career for DOD. My boss had a story about Government service: “There was a janitor working the night shift, unsupervised. The personnel office decided he needed a supervisor. When budget cuts required staffing reduction – they fired the janitor.” It’s a joke, but that’s what DOGE is doing now. They need to focus on efficiency and reduce management levels – not just fire people indiscriminately.
“Sales of new U.S. single-family homes fell more than expected in January as persistently high mortgage rates sidelined potential buyers, the latest indication that housing market and overall economic activity slowed early in the first quarter. The steep decline in new home sales, reported by the Commerce Department on Wednesday, also likely reflected the impact of snowstorms and extremely cold weather in much of the country last month... New home sales plunged 10.5%...” Story at...
https://finance.yahoo.com/news/us-home-sales-fall-sharply-151151798.html
-Wednesday the S&P 500 little changed at 5956.
-VIX declined about 2% to 19.10.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.268%.
XLK – Holding since the October 2022 lows. Cut position in half – Monday, 2/24.
QLD – Sold 2/25.
NVDA – added 1/6/2025.
https://www.cnbc.com/2025/02/26/nvidia-nvda-earnings-report-q4-2025.html
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 20 gave Bear-signs and only 1 was 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 fell further to a Bearish -19 (19 more Bear indicators than Bull indicators). (I had a typo here yesterday – the spread was 16 yesterday.) The 10-dMA of the spread continued falling, a bearish sign. (The Bollinger Band indicator was neutral today.)
I am bearish. I’ll watch market action tomorrow. I may reduce stock holdings again. Nvidia didn’t give us any bounce today after hours.
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
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.
