Trump Tariffs ... ISM Manufacturing ... Construction Spending ... 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.
 
TEEN UNEMPLOYMENT AND MINIMUM WAGE (WSJ)
“...unemployment among 16 to 19 years old has shot up to 15.2% in July from 11.8% in January. The share of teens who are working is the lowest since August 2020, when most states were still locked down amid the pandemic...

What do you know? When government increases the price of labor, employers use less of it. Teen unemployment rates in Colorado (16.4%), Washington state (14.8%) and Illinois (14.2%) were also among the highest in the country. So are their minimum wages: Washington ($16.66 an hour), Illinois ($15), and Colorado ($14.81)...
...  Politicians love to claim credit for raising the minimum wage, but they never consider the unintended casualties—idle young people who will be less equipped for future careers and life.” – The Editorial Board, WSJ. Commentary at...
https://www.wsj.com/opinion/teen-unemployment-minimum-wage-states-8b32de44?mod=opinion_lead_pos3
 
THE PRESIDENT MAKES THE DEMOCRATS EFFORTS AGAINST HIM LOOK LIKE CHILDS PLAY (WSJ)
“...The list of Trump administration investigations into political opponents seems as long as a congressional omnibus. Trump personnel have reportedly launched probes into Mr. Comey (a former Federal Bureau of Investigation director), Mr. Smith (a former special counsel), members of Mr. Smith’s legal team, John Brennan (a former Central Intelligence Agency director), federal prosecutors who brought Jan. 6 charges, New York Attorney General Letitia James, California Sen. Adam Schiff, New Jersey Gov. Phil Murphy, New Jersey Attorney General Matt Platkin, former New York Gov. Andrew Cuomo, Federal Reserve      Gov. Lisa Cook, and Democratic fundraising platform ActBlue. To name some.
Note, too, political affiliation. Mr. Trump is targeting Republican critics and Democrats alike. The GOP list incudes former national security adviser John Bolton, former senior Homeland Security Department official Miles Taylor, and former Cybersecurity and Infrastructure Security Agency head Christopher Krebs. Mr. Trump even suggested reinvestigating former New Jersey Gov. Chris Christie over the 2013-14 hoopla of Bridgegate, “for the sake of JUSTICE” and because “NO ONE IS ABOVE THE LAW!”...
... Generations of leaders understood the risk of criminalizing political acts and creating a prosecutorial race to the bottom. No longer. We’re there now. Congrats, D.C. What a skill to have honed.” - Kimberley A. Strassel, Opinion Columnist, Potomac Watch, The Wall Street Journal. Commentary at...
https://www.wsj.com/news/author/kimberley-a-strassel
My cmt: No one is above the law? Hilarious comment from the Criminal in Chief. The man who still claims he won the 2020 election that he clearly lost.
         
TRUMP TARIFFS ARE ILLEGAL (CBS News)
“The U.S. Court of Appeals for the Federal Circuit ruled Friday that Mr. Trump went too far when he declared national emergencies to justify tariffs on nearly every country on Earth. The ruling largely upheld a May decision by a federal trade court in New York. But Friday's 7-4 appeals court decision tossed out a part of that ruling striking down the tariffs immediately, giving his administration time to appeal to the U.S. Supreme Court.” Story at... 
https://www.cbsnews.com/news/trump-tariffs-federal-appeals-court-rules-illegal-what-happens-next/
 
“I am a free market with guardrails guy. I like small government and less government intervention, regardless of party. I have been firmly against this or any president publicly attacking the Fed nor its Chair. It undermines the independence and damages credibility. It’s also not good for our capital markets. I know Truman and Nixon also had more public beefs with the Fed in different times. I do not like any president picking winners and losers and corporate America. I want all of corporate America to succeed on a level playing field. As such I am firmly against the government taking equity stakes in any company, including Intel. I do not want the government buying stakes in a bunch of “strategically important” companies which would disadvantage others.” – Paul Schatz, President Heritage Capital.
 
CONSTRUCTION SPENDING (Yahoo Finance)
The Commerce Department's Census Bureau said on Tuesday that construction spending slipped 0.1% after an unrevised 0.4% drop in June.” Story at...
https://finance.yahoo.com/news/us-construction-spending-dips-july-142517067.html
 
ISM MANUFACTURING (ISM via prnewswire)
“Economic activity in the manufacturing sector contracted in August for the sixth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest ISM® Manufacturing PMI® Report... ‘In August, U.S. manufacturing activity contracted at a slightly slower rate, with new orders growth the biggest factor in the 0.7-percentage point gain of the Manufacturing PMI®. However, since production contracted at a rate nearly equal to the expansion in new orders, the Manufacturing PMI® increase was nominal.’” Press release at...
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-48-7-august-2025-ism-manufacturing-pmi-report-302543264.html
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 declined about 0.7% to 6416.
-VIX rose about 12% to 17.17.
-The yield on the 10-year Treasury rose to 4.265% (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, 7 gave Bear-signs and 13 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 +4 to +6 (6 more Bull indicators than Bear indicators) and is now giving a slightly Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread continued down (although at a slower rate of decline) – a bearish sign.
 
Tariffs are actually paid here in the US, by businesses and consumers.)
One would think that cancelling tariffs would be good for business, but Interest rates shot up today on the illegal tariff news (see above article).  30-year US Treasuries rose to nearly 5% today. If tariffs are illegal, then the US will have to reimburse the funds collected sending the deficit higher than its already extreme number.
 
Checking the charts, the S&P 500 is on its lower trendline; however, it is 1.4% above its 50-dMA and the 50-day often aligns with the lower trendline. There is good support at the 50-day and at the lower trendline. The Index is 7.6% above its 200-dMA if this weakness deteriorates into more selling.
 
The high for the day was essentially at the close; that’s a good sign – let’s hope there is some follow-through Wednesday.
 
As we noted earlier, there are still 13 Bull indicators so a major crash is not indicated now. It could always happen – PEs are elevated/sentiment is high – but indicators don’t suggest it yet.
 
The biggest concern remains: all of the ETFs that I track for momentum purposes are above their respective 120-dMAs.  That signals a top, but declines following the signal are often small, and the signal can be early.
 
I suggested earlier that the most likely interpretation is that this decline over the last 5-days or so (the Index is now slightly below where it was 5-days ago) may just be a return to the lower trendline. We’ll see...
 
BOTTOM LINE
I remain cautiously bullish to neutral.
 
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

TUESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to 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 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.