Jobless Claims ... Durable Orders ... 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.
 
“Federal employees do not deserve their jobs. Federal employees do not deserve their paycheck, and these are jobs that can be fired at will.” – Majorie Taylor Greene
 
JOBLESS CLAIMS (CBS News)
Applications for U.S. jobless benefits rose to a three-month high last week but remained within the same healthy range of the past three years. The number of Americans filing for jobless benefits for the first time rose by 22,000 to 242,000 for the week ending Feb. 22...” Story at...
https://www.cbsnews.com/news/unemployment-benefits-claims-rise-2025/
 
DURABLE ORDERS (WSJ)
“Orders for durable goods in the U.S. recovered at the start of the year, as airplane orders reversed. Total orders for goods made to last at least three years were 3.1% higher in January than they were in December, figures from the Commerce Department showed Thursday.” Story at... 
https://www.wsj.com/livecoverage/stock-market-today-dow-sp500-nasdaq-02-27-2025/card/u-s-durable-goods-orders-surge-on-plane-demand-bBE1jx67Kt3dgJk3sBhk
 
STOCK MARKET FALL HAS JUST BEGUN (Barrons via msn)
“The stock market’s mild drop could easily turn into a larger decline. Truist Wealth Management’s co-chief investment officer, Keith Lerner, downgraded equities to Neutral from Attractive. The S&P 500 is down just over 2% to about 6000 from the record close of 6144 it hit earlier this month. That might appear to be an innocuous decline, but it is the result of a weakening economic picture. Combined with the fact that the index is still trading expensively, that sets it up for more losses... As Lerner pointed out, “the flatlining of earnings is occurring at a time when the S&P 500 trades at the top-end of its valuation range.”
That is why the market has just begun to crack. Any one of a number of factors could send it tumbling. First-quarter earnings reports and company outlooks could do it, though they won’t roll in for several weeks. More weakness in economic data could also spark selling. Confirmation from Trump on the extent and timing of tariffs could also hurt, especially because the Fed’s coming interest-rate announcements may indicate that rates could stay higher for longer.” Story at...
The Stock Market’s Fall Has Just Begun. This Strategist Explains Why.
 
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Thursday the S&P 500 fell about 1.6% to 5862.
-VIX rose about 11% to 21.13.
-The yield on the 10-year Treasury was little changed (compared to about this time, prior trading day) at 4.269%.
 
MY TRADING POSITIONS:
XLK – Sold 2/27. I’ll owe some big capital gains on this one.
NVDA – sold 2/27. This was a loser for me.  That’s what I get for buying at the top. (May be worth buying when this correction is over.)
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 18 gave Bear-signs and 5 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

Today’s chart was weak with a nasty selloff into the afternoon. Indicators slipped from mid-day too.
 
The daily, bull-bear spread of 50-indicators improved to a still Bearish -13 (13 more Bear indicators than Bull indicators). The 10-dMA of the spread continued falling, a bearish sign.
 
Some were suggesting that the decline would stop at the 100-day moving average (100-dMA) for the S&P 500, 5950. That didn’t happen. The next line of defense is the 200-dMA at 5716, only 2.5% lower than today’s close.
 
There were some bottom indicators today: Bollinger Bands and RSI are both “oversold.” That can be a good bottom indicator for small corrections, but indications are that this may not be a small correction. When I look for other bottom signs, I don’t see any.
 
Predicting how far markets may fall in a correction is mostly guesswork.  I have only one indicator that helps. Breadth was very poor at the recent S&P 500 top and that suggests a drop from the top of more than 10%. As of Thursday (today), the drop from the top is 4.2%. Of course, there are no guarantees, but cutting risk makes sense. The important strategy for retirees (and most others) is to avoid losses, so I am now very conservatively invested.
 
BOTTOM LINE
I am bearish with a very conservative allocation of only about 30% invested in stock holdings.
 
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
 
THURSDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals declined to SELL. (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 30% stocks, including stock mutual funds and ETFs – somewhat bearish. (I’ll need to recalculate the %.) 50% invested in stocks is a normal position. (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.