“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
“There is a school of thought that stock market turning points happen when most investors are overly bullish or bearish. Of course, it's challenging to judge exactly how bullish or bearish is "too" much, which is why the old Wall Street adage "stocks can remain irrational longer than you can remain solvent" is popular.
Still, the latest Bank of America Fund Manager Survey shows Wall Street pros may be getting a bit giddy, which may ring alarm bells for some investors who have been sitting on big profits since April's stock market low... The results show fund managers are "the most bullish FMS since Feb'25," with "cash as % AUM [assets under management] at historically low 3.9%." Story at...
Bank of America survey pours cold water on 'cash on sidelines' argument
“The U.S. budget deficit in July climbed 20% this fiscal year compared to the last despite the U.S. taking in record income from President Donald Trump’s tariffs, according to Treasury Department data released Tuesday...A Treasury official who spoke on the condition of anonymity to preview the data said overall increased spending is in part due to a mix of expenditures, including growing interest payments on the public debt and cost-of-living increases to Social Security payouts, among other costs. This comes as the federal government’s gross national debt creeps up to the $37 trillion mark. [About $370,000 for every taxpayer.]” Story at...
US July budget deficit up 20% year-over-year despite record Trump tariff income
“The stock market surged to a fresh record high on Tuesday after consumer prices edged up slightly in July, with the S&P 500 index ending above 6,400 for the first time in history... Yet a growing concern has been that tariff shocks still lurk on the horizon. Should that happen, higher prices could clamp down further on consumer spending — the economy’s biggest driver. “I am losing sleep based on the unknowns around tariffs,” said Mike Petrakis, founder and chief executive at PowerPay, a fintech home-improvement lender...
...“So far, many businesses have managed to soften the impact of rising costs by relying on pre-tariff inventories, utilizing trade zones and accepting slimmer profit margins,” said Lydia Boussour, a senior economist at EY-Parthenon, in a Tuesday client note...
...“I still don’t think the consumer has fully felt the brunt of all the tariffs,” Ferrara [an investment strategist at Gateway Investment Advisors] said Tuesday. Paying a dollar more for bunch of bananas might be manageable, he said, but anyone needing to buy a big-ticket item, like a new washing machine or a car, could face paying hundreds of dollars more, due to tariffs, he said.” Story at...
As the S&P 500 ends above 6,400 for the first time, here are a few reasons for caution
“American households and investors cheered the latest Consumer Price Index (CPI) report showing tame inflation that could move the Federal Reserve to cut interest rates in September...Traders are now pricing in a nearly 91% chance of a rate cut next month, according to the widely watched CME Group FedWatch Tool...[but] Federal Reserve Bank of Kansas City President Jeff Schmid said he favors keeping interest rates on hold for the time being...Elyse Ausenbaugh of J.P. Morgan Wealth Management said the softness in the July jobs report should be enough to sway FOMC members to resume cuts in the meetings ahead. ‘Overall, it seems fair to say that the Fed could be considering a move in September, but I don’t think a cut at that meeting is as much of a given as market pricing is implying,’’’ Story at...
Cool CPI report sparks mixed forecasts on Fed rate cut
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3 million barrels from the previous week. At 426.7 million barrels, U.S. crude oil inventories are about 6% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
-Wednesday the S&P 500 rose about 0.3% to 6467.
-VIX fell about 2% to 14.49.
-The yield on the 10-year Treasury declined to 4.238% (compared to about this time prior market day).
None
Today, of the 50-Indicators I track, 3 gave Bear-signs and 20 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 drastically improved from +15 to +17 (17 more Bear indicators than Bull indicators). I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is rising too – a bullish sign.
-Bollinger Bands are giving an overbought-signal. RSI is not, so Bollinger Bands aren’t concerning yet.
-The S&P 500 is 9.2% above its 200-day moving average (200-dMA). That’s elevated, but it won’t trigger a bearish signal until it rises above 12%.
I’m cautiously bullish.
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
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
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.
