PPI ... 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.
 
THE WORRY IS INFLATION, NOT JOBS (USA Today)
“A Federal Reserve official [Austan Goolsbee, president of the Federal Reserve Bank of Chicago and a voting member of the Fed's interest rate setting committee] on Aug. 13 said he’s more concerned about last month’s rise in underlying inflation than an unusually weak jobs report, hinting he may not be inclined to support an interest rate cut in September as many economists expect... Goolsbee said Trump’s immigration crackdown likely has affected population growth and the jobs numbers, but that doesn’t mean the labor market has substantially weakened. He noted job opening and hiring rates are comparable to prepandemic levels. And the unemployment rate, at 4.2%, remains historically low.” Story at...
Fed's Goolsbee is concerned about inflation, not jobs, hinting at high bar for rate cut
 
RUH ROH! – NDX STOCKS LEAVING THE PARTY (McClellan Publications)
“Apple, Microsoft, and Nvidia are doing fine, but...a declining number of NDX component stocks are above their own 100-day MAs.  That number peaked at 84 stocks above their 100MAs back on July 24, and now just 2 weeks later it is down to just 63 stocks. This is a big and rapid divergence between the index and this measure of NDX component breadth.  Divergences like this have been seen before at important price tops... Because the bigger stocks matter more for the calculation of the index, the suffering of the smaller components goes unnoticed in the index.  But it does tend to matter, eventually, when the drying up of liquidity comes around to bite the big ones too.” – Tom McClellan. Commentary at...  
https://www.mcoscillator.com/learning_center/weekly_chart/ndx_stocks_are_leaving_the_party/
 
JOBLESS CLAIMS (Yahoo Finance)
“Initial claims for state unemployment benefits dropped 3,000 to a seasonally adjusted 224,000 for the week ended August 9, the Labor Department said on Thursday... Financial markets have priced in an interest rate cut from the Federal Reserve next month because of the labor market weakness. But some economists cautioned that rising services inflation as well as expectations of more expensive goods due to tariffs could make policymakers hesitant to pull the trigger.” Story at...
https://finance.yahoo.com/news/us-weekly-jobless-claims-fall-123733370.html
 
PPI (CNBC)

“Wholesale prices rose far more than expected in July, providing a potential sign that inflation is still a threat to the U.S. economy, a Bureau of Labor Statistics report Thursday showed. The producer price index, which measures final demand goods and services prices, jumped 0.9% on the month...Excluding food and energy prices, core PPI rose 0.9% against the forecast for 0.3%. ” Story at...
https://www.cnbc.com/2025/08/14/ppi-inflation-report-july-2025-.html
My cmt: PPI tends to lead CPI so, this calls into question the assumed FED rate cut in September.
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.03% to 6469.
-VIX rose about 2% to 14.83.
-The yield on the 10-year Treasury rose to 4.287% (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, 3 gave Bear-signs and 21 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 +17 to +18 (18 more Bull (!!) indicators than Bear (!!) indicators). I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is rising too – a bullish sign.
 
The S&P 500 made another new high today, but just barely. Only 2.8% of issues on the NYSE made new, 52-week highs. That’s a bearish stat that, by itself, suggests at least a 10% correction. I’ll ignore this for now.  The day was down until the last hour and then the S&P 500 nearly closed lower. I could be wrong, but it seems like that for this to be valid, we would need to see a solid up-day. Weak breadth on that sort of day (signaled by low new-highs) would clearly be a warning. Now, we can’t be sure the signal is valid. The good news is that there were only 3 bearish signs.
 
The smart move would have been to add to stock holdings today, but I wanted to see how the bad PPI numbers would affect the markets. Surprisingly, they had very little impact. When markets go up on bad news, it’s good news.
 
I need to get off my lazy butt and add to stock positions.
 
I won’t go all-in, since I suspect we’ll get a better buying point before the new-year, but on the other hand, that’s what I think. We need to trade what we see and the indicators are suggesting the markets go higher. 
 
BOTTOM LINE
I’m cautiously bullish. My only concern: Indicators are now so bullish it’s scary.
 
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 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.