... 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.
 
INTEREST CLIMBS OVER 1-TRILLION (Washington Examiner)
“The Congressional Budget Office estimated Wednesday that the federal budget deficit for fiscal 2025 was $1.8 trillion as interest payments crossed $1 trillion for the first time.” Story at...
Interest payments eclipsed $1 trillion as federal deficit hit $1.8 trillion in fiscal 2025, CBO says
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 declined about 0.3% to 6735.
-VIX rose about 1% to 16.43.
-The yield on the 10-year Treasury rose to 4.138% (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, 14 gave Bear-signs and 11 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 declined from +1 to -3 (3 more Bear indicators than Bull 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 continued to move higher – a Bullish sign. The 10-day has been flopping back and forth and without much direction so the 10-day isn’t helping yet. If the direction is sustained longer perhaps we can believe it.
 
One of my more esoteric indicators calculates the standard deviation of daily moves in the S&P 500.  When those moves become too similar (usually a very calm market) it flashes a top-warning.  That indicator warned today. It is frequently correct, but unfortunately, it is not a timely indicator.  The Top could be now, or as much as a month away. With this indicator and others warning recently, the top could have been yesterday.
 
We saw a Bearish Outside Reversal Day Tuesday.  Now, we have another one Thursday.
“An outside reversal is a price pattern that indicates a potential change in trend on a price chart. The two-day pattern is observed when a security’s high and low prices for the day exceed the high and low of the previous day’s trading session... Technical analysts and experienced traders prefer to build trading signals using this identification in conjunction with other information such as trend, support and resistance or technical studies.” – Investopedia.
 
I wrote yesterday 8 of the last 10-days have been up, so it is not surprising that the S&P 500 declined Thursday. As of Thursday, there still have been 8 up-days in the last 10. That’s suggesting a down-day Friday, but it is not yet giving a top warning.
 
I don’t yet have enough indicators issuing top-warnings so I won’t make any changes to the portfolio. Based on breadth at the all-time high we saw Wednesday, if the markets do go into correction mode, the most likely outcome would be for a decline not greater than 10%.
 
It still appears that the S&P 500 will drift back towards its lower trendline. 
 
BOTTOM LINE
I am Neutral. Let’s see how the S&P 500 performs over the next few days.
 
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.