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:
 

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 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.