“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.
SCHUMER’S HYPOCRACY
“What if I persuaded my caucus to say I’m going to shut the government down, I am going to not pay our bills unless I get my way? It’s a politics of idiocy, of confrontation, of paralysis.” – Senator Chuck Schumer (D-NY) complaining about the Republican led shutdown in 2013. (from CNN)
TURLEY BLOG EXCERPT
“Hashmi [Ghazala Firdous Hashmi, candidate for Virginia’s next lieutenant governor] is continuing the Democratic narrative that democracy is dying in America and tyranny is on the rise. It was the mantra before the last election when Republicans secured control of both houses and the White House. Despite that failure, Democrats are doubling down on rage rhetoric and unhinged claims... Some will hear such inflammatory comments as a license to take extreme actions, including violence.” – Jonathon Turley, Turley holds the Shapiro Chair for Public Interest Law at The George Washington University Law School, where he teaches torts, criminal procedure, and constitutional law.
https://jonathanturley.org/2025/10/03/rip-constitution-democratic-candidate-for-virginia-lt-governor-holds-startling-rally/#more-236564
TRUMP CLAIMS U.S. CAN GROW ITS WAY OUT OF DEBT – NOT SO
FAST SAYS RAY DALIO (Fortune)
“We are becoming a country that is so rich, so powerful...With the kind of growth we have now, the debt is very low relatively speaking. You grow yourself out of that debt.” – Donald Trump
“President Donald Trump’s assertion that U.S. growth can tame debt echoes what Ray Dalio has called the most dangerous phase of a debt cycle: when leaders mistake prosperity for immunity.” Story at...
Trump says the U.S. can grow its way out of $37 trillion in debt. Ray Dalio’s debt-cycle research says not so fast
My cmt: Grow out of debt? Every President from Reagan to now has made that claim. Has it worked? Since 1980 the US has gone from near zero debt to $37-trillion. Inconceivable!
HOW TO MEASURE A BUBBLE (Felder Report)
“Ian Harnett argues, the current [AI] bubble may be approaching its ‘endgame.’ He writes, ‘Until recently, the missing ingredient was the rapid build-out of physical capital. This is now firmly in place, echoing the capex boom seen in the late-1990s bubble in telecommunications, media and technology [TMT] stocks. That scaling of the internet and mobile telephony was central to sustaining ‘blue sky’ earnings expectations and extreme valuations, but it also led to the TMT bust.’” From...
https://thefelderreport.com/2025/10/04/how-do-you-measure-a-bubble/
PROMISED RECESSION...SO WHERE IS IT? (Real Investment
Advice)
“If the recession scenario plays out, equity valuations will likely compress, earnings estimates will fall, and risk assets will reprice lower...
...If the no-recession scenario materializes, markets may not be “all clear” either. Corrections occur annually and can impact portfolio performance and investor psychology...The S&P 500 is trading at multiples historically reserved for periods of strong, broad-based growth, leaving little margin of safety. Even modest disappointments could trigger corrections.
I always return to risk management here. As I’ve written many times, investing is not about making bold predictions but instead aligning portfolios to probabilities, protecting against the downside, and participating in the upside when it comes.
Today, that means remaining cautious even as markets cheer new highs. It means trimming exposure where valuations are stretched, holding a healthy allocation to cash and fixed income, and being selective in equity exposure. It means acknowledging that both outcomes—recession and no recession—are plausible and positioning accordingly.” Lance Roberts. Commentary at...
https://realinvestmentadvice.com/resources/blog/promised-recession-so-where-is-it/
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was up about 0.4% to 6740.
-VIX declined about 2% to 16.37.
-The yield on the 10-year Treasury rose to 4.158% (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:
No change from Friday: Today, of the 50-Indicators I track, 9 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 remained +4 (4 more Bull indicators than Bear indicators), and remained a Neutral indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained flat – a Neutral sign.
There was a lot of “bubble talk” today on CNBC and also
on the internet. Understandably so, valuations are stretched. That doesn’t mean they can’t stretch farther.
When the S&P 500 made a new high today, 6.6% of issues on the NYSE made
new, 52-week highs. This is about the 5-year average, so that’s good news.
If investors had decided that valuations were too high
and it was time to sell, we would see the markets narrowing. When valuations are too high, investors buy
quality, i.e., more money gets concentrated in fewer stocks.
The Index closed 11.7% above its 200-day. For my
purposes, when the S&P 500 is 12% above its 200-dMA, it is too stretched
and issues a bearish signal. I don’t act on one signal, but it does warn that
it may not be a good time to add new money to stocks.
The S&P 500 has had 7 up-days in a row. As previously noted, that sort of action
suggests a down-day Tuesday. (I’ve been
saying that awhile, but the market keeps going up.) We also note that 7 of the
last 10-days have been up and 14 in the last 20-days, but that is not enough to
suggest a more significant reversal.
I’m fully invested, but I have not seen enough to put any
additional cash holdings into stocks. “Cash” in my money market is still
earning 3.9%. So, the trick is to remain patient.
BOTTOM LINE
I am cautiously bullish. I’ll be paying attention to indicators, as always.
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
MONDAY 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.
“What if I persuaded my caucus to say I’m going to shut the government down, I am going to not pay our bills unless I get my way? It’s a politics of idiocy, of confrontation, of paralysis.” – Senator Chuck Schumer (D-NY) complaining about the Republican led shutdown in 2013. (from CNN)
“Hashmi [Ghazala Firdous Hashmi, candidate for Virginia’s next lieutenant governor] is continuing the Democratic narrative that democracy is dying in America and tyranny is on the rise. It was the mantra before the last election when Republicans secured control of both houses and the White House. Despite that failure, Democrats are doubling down on rage rhetoric and unhinged claims... Some will hear such inflammatory comments as a license to take extreme actions, including violence.” – Jonathon Turley, Turley holds the Shapiro Chair for Public Interest Law at The George Washington University Law School, where he teaches torts, criminal procedure, and constitutional law.
https://jonathanturley.org/2025/10/03/rip-constitution-democratic-candidate-for-virginia-lt-governor-holds-startling-rally/#more-236564
“We are becoming a country that is so rich, so powerful...With the kind of growth we have now, the debt is very low relatively speaking. You grow yourself out of that debt.” – Donald Trump
“President Donald Trump’s assertion that U.S. growth can tame debt echoes what Ray Dalio has called the most dangerous phase of a debt cycle: when leaders mistake prosperity for immunity.” Story at...
Trump says the U.S. can grow its way out of $37 trillion in debt. Ray Dalio’s debt-cycle research says not so fast
My cmt: Grow out of debt? Every President from Reagan to now has made that claim. Has it worked? Since 1980 the US has gone from near zero debt to $37-trillion. Inconceivable!
“Ian Harnett argues, the current [AI] bubble may be approaching its ‘endgame.’ He writes, ‘Until recently, the missing ingredient was the rapid build-out of physical capital. This is now firmly in place, echoing the capex boom seen in the late-1990s bubble in telecommunications, media and technology [TMT] stocks. That scaling of the internet and mobile telephony was central to sustaining ‘blue sky’ earnings expectations and extreme valuations, but it also led to the TMT bust.’” From...
https://thefelderreport.com/2025/10/04/how-do-you-measure-a-bubble/
“If the recession scenario plays out, equity valuations will likely compress, earnings estimates will fall, and risk assets will reprice lower...
...If the no-recession scenario materializes, markets may not be “all clear” either. Corrections occur annually and can impact portfolio performance and investor psychology...The S&P 500 is trading at multiples historically reserved for periods of strong, broad-based growth, leaving little margin of safety. Even modest disappointments could trigger corrections.
I always return to risk management here. As I’ve written many times, investing is not about making bold predictions but instead aligning portfolios to probabilities, protecting against the downside, and participating in the upside when it comes.
Today, that means remaining cautious even as markets cheer new highs. It means trimming exposure where valuations are stretched, holding a healthy allocation to cash and fixed income, and being selective in equity exposure. It means acknowledging that both outcomes—recession and no recession—are plausible and positioning accordingly.” Lance Roberts. Commentary at...
https://realinvestmentadvice.com/resources/blog/promised-recession-so-where-is-it/
-Monday the S&P 500 was up about 0.4% to 6740.
-VIX declined about 2% to 16.37.
-The yield on the 10-year Treasury rose to 4.158% (compared to about this time prior market day).
SPY – Added 8/26/2025
XLK – Added 8/26/2025
No change from Friday: Today, of the 50-Indicators I track, 9 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 remained +4 (4 more Bull indicators than Bear indicators), and remained a Neutral indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained flat – a Neutral sign.
I am cautiously bullish. I’ll be paying attention to indicators, as always.
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)
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
MONDAY MARKET INTERNALS (NYSE DATA)
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.
