Car Loan Defaults ... Home Sales ... 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.
 
NATONAL DEBT ACCELERATES (Fortune)
“The U.S. national debt has surged past $38 trillion, according to the U.S. Treasury Department,...Michael A. Peterson, CEO of the nonpartisan watchdog dedicated to fiscal sustainability, said this landmark is “the latest troubling sign that lawmakers are not meeting their basic fiscal duties.” In a statement provided to Fortune, Peterson said that “if it seems like we are adding debt faster than ever, that’s because we are. We passed $37 trillion just two months ago, and the pace we’re on is twice as fast as the rate of growth since 2000.’... “Adding trillion after trillion to the debt and budgeting-by-crisis is no way for a great nation like America to run its finances,” Peterson said. “Lawmakers should take advantage of the many responsible reforms available that would put our nation on a stronger path for the future.’” Story at...
As national debt accelerates to $38 trillion, watchdog warns it’s ‘no way for a great nation like America to run its finances’
 
CRISIS BIGGER THAN GREAT RECESSION? (Daily Express)
“...experts are sounding the alarm about another impending crisis for the US economy. This crisis pertains to the car lending market and an escalating number of car repossessions in the United States due to Americans defaulting on their car finance payments - a problem affecting millions and setting off warning signals on Wall Street... Carl [Carl Hazeley, CEO of financial information platform Finimize] stated: "Car finance defaults are worth watching closely. Auto loan delinquencies are approaching Great Recession levels, with nearly 5% of loans currently delinquent and subprime delinquencies at 6.43%. "What makes this particularly concerning is the cascade effect. Losing access to a car can mean losing your job, your ability to get your kids to school, or access to healthcare." Story at...
Donald Trump's economy on verge of crisis 'bigger than Great Recession', experts warn
 
EXISTING HOME SALES (Builder)
“Existing-home sales remained relatively stable in September, increasing by 1.5% month-over-month, and 4.1% year-over-year, according to the National Association of Realtors (NAR). Sales increased on an annual basis in all regions except the West, where sales were flat compared to September 2024.” Story at...
https://www.builderonline.com/data-analysis/existing-home-sales-increase-as-inventory-reaches-five-year-high
 
KC FED MANUFACTURING (Market Screener)
“Activity at factories in the central U.S. improved further this month, with expectations for future activity jumping as the Federal Reserve mulls lowering borrowing costs further. The Federal Reserve Bank of Kansas City said Thursday that its Tenth District Manufacturing Survey's composite index climbed to 6 this month from 4 in September, marking a fourth straight month of expansion after more than three years in contraction.” Story at... 
https://www.marketscreener.com/news/central-u-s-manufacturing-activity-increases-at-faster-pace-kansas-city-fed-ce7d5dd8df88f021
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.6% to 6738.
-VIX declined about 7% to 17.3.
-The yield on the 10-year Treasury rose to 4.005% (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, 5 gave Bear-signs and 15 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 +5 to +10 (10 more Bull indicators than Bear indicators), a strong Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it continued higher, a Bullish sign.
 
The S&P 500 is 10.8% greater than its 200-dMA. The 10-15% zone is where we often see weakness in the markets so it is hard to say whether we’ll see much of a fall rally that the pundits are talking about on CNBC. My guess is that we will, but the odds aren’t as good as we’d like.
 
Tomorrow, Friday, we’ll get the September CPI report at 8:30 am. The expectation is for CPI around 3%. This is the first “big” federal report since the shutdown started. Last month the annual CPI was 2.9%.
 
There is a term, “Critical Mass,” espoused by Bob Brinker of Money-Talk fame.  Critical Mass refers to the amount of funds that are enough to retire comfortably. At that point, there should be an investment philosophy to take less risk.  Why risk the critical mass? The recommended portfolio for retirees is usually balanced with 50% in stocks and 50% in Bonds. This allows the portfolio to keep up with inflation while providing income. This portfolio also reduces risk by cutting stock exposure. I agree that less risk is a good idea and I have about 50% in stocks now; but rather than put 50% in Bonds, I am usually around 25% in bonds and 25% in cash.  I trade the cash with a goal of earning more than 5%. If I do, I have probably earned more than I would have in Cash or Bonds with less risk. Additionally, I am often able to far exceed the goal.  That is a round-about discussion of why I didn’t add to stocks today. I expect a better opportunity later.
 
BOTTOM LINE
I’m 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 Neutral. (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.