Philly Fed... Retail Sales ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 

"Never underestimate the power of stupid people in large groups." – George Carlin
My cmt: The Democrats have shut-down government to force the Republicans to vote for Health insurance increases. As a practical matter, given the deficit, why push for restarting Health Care payments to insurance companies for a program that was started as COVID relief and has now expired?
 
“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.
 
“Our call of the day suggests something under the surface of the market may have shifted after last week’s selloff, with a pullback just getting started. Independent research consultancy Longview Economics’ global economist and chief market strategist Chris Watling told clients on Monday that he’s cautious where stocks are concerned.” Story at...
Friday’s selloff broke something in the stock market. Here’s what that means for investors.
 
“Don’t fight the Fed.”  -  Stephanie Link, Chief Investment Strategist and Head of Investment Solutions at Hightower Advisors and CNBC commentator.
 
PHILLY FED BUSINESS INDEX (RTT News)
“The Federal Reserve Bank of Philadelphia released a report on Thursday showing a substantial pullback by its reading on regional manufacturing activity in the month of October. The Philly Fed said its diffusion index for current general activity plummeted to a negative 12.8 in October...” Story at...
https://www.rttnews.com/amp/3582869/philly-fed-index-plunges-to-six-month-low-in-october.aspx
 
RETAIL SALES
Credit-Card Data Show Softer US Retail Sales as Shutdown Delays Report
My cmt: The article pointed out that since official data is not available, investors are scrambling to find other sources.
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 declined about 0.6% to 6629.
-VIX rose about 23% to 25.31.
-The yield on the 10-year Treasury declined to 3.975% (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, 17 gave Bear-signs and 4 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 -4 to -13 (13 more Bear indicators than Bull indicators), an obviously Bearish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained down – a Bearish sign.
 
The S&P 500 is about 1% above its 50-dMA. Five days ago, the S&P came close to its 50-dMA and bounce higher. My guess is that it will fall below the 50-day this time. I think the dip-buyers are running out of steam.
 
Repeating:
We’ve seen 6 Bearish Outside Reversal Days in the last 6 weeks.  The last time that happened was in the 7-weeks prior to the 8.5% correction that bottomed in August of 2024. This signal remains in place until the S&P 500 closes above the high for the day on the Outside Reversal day.
 
The Hindenburg Omen signal remains in place until the McClellan Oscillator turns positive.
 
Now I must be bearish. Indicators are falling as is the 10-dMA of indicator spread. Volumes on the NYSE have been rising suggesting that more investors are becoming concerned.
 
BOTTOM LINE
I am Bearish, but I doubt that this will turn into a major correction. Breadth was good at the top. My guess is for about a 7% - 10%decline. I may not be able to call a bottom - small declines give small signals – but we’ll try.
 
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 declined to SELL. (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.