ADP Employment … 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.
 
“Never, never, never, believe any war will be smooth and easy, or that anyone who embarks on that strange voyage can measure the tides and hurricanes he will encounter. The Statesman who yields to war fever . . . is no longer the master of policy but the slave of unforeseeable and uncontrollable events.” - Winston Churchill.
 
“We’re not looking for a fight, but Iran also cannot be allowed to block innocent countries and their goods from an international waterway. Iran’s plan, a form of international extortion, is unacceptable.” – Pete Hegseth, Secretary of Defense (War).
 
“Iran has been carrying out the fastest wave of political executions in its recent history. In just seven weeks, at least 28 people have been put to death on political, protest-related, or espionage charges, according to a US-based human rights group. CNN’s Clarissa Ward reports.” - CNN
 
WSJ LETTERS (WSJ)
“Regarding Alan Dershowitz’s op-ed “Why I’m Becoming a Republican” (April 21): As the daughter of Holocaust survivors, I am sickened by how anti-Israel the Democratic Party has become. The vast majority of 20th-century Jewish immigrants who came to the U.S. all voted Democratic.
They would be horrified by what has become of the party. It’s too bad that Trump Derangement Syndrome has mutated into Israel Derangement Syndrome.” - Judith Levine
 
APOLLO CEO WARNS OF CORRECTION (CNBC)
“Apollo Global Management CEO Marc Rowan on Wednesday warned investors that he is preparing his giant asset management firm for a potential market downturn and sharply criticized what he called the “egregious” practices of some rival insurers…“Everything we see in front of us is actually quite strong,” Rowan said. But there is “a much greater chance, in our opinion, of out-of-sideline results.’…Rowan put the odds of an exogenous shock at somewhere between 30% and 35%, far higher than the usual level of risk, he said.” Story at…
https://www.cnbc.com/2026/05/06/apollo-ceo-rowan-market-correction-rival-insurers.html
 
ADP EMPLOYMENT (ADP)
“Private sector employment increased by 109,000 jobs in April and pay was up 4.4 percent year-over-year according to the April ADP National Employment Report®…’Small and large employers are hiring, but we're seeing softness in the middle," said Dr. Nela Richardson, chief economist, ADP. "Large companies have resources to deploy, and small ones are the most nimble, both important advantages in a complex labor environment.’" Press release at…
https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-109-000-jobs-in-april-annual-pay-was-up-4-4-302764101.html
 
QUICK MARKET SUMMARY
-Wednesday the S&P 500 rose about 1.5% to 7365.
-VIX rose about 0.1% to 17.39.
-The yield on the 10-year Treasury declined to 4.426% (compared to about this time prior market day).
 
MY TRADING POSITIONS
SPY – Added 12/1/2025.
NVDA – Added 12/1/2025 & 2/6/2026
“Despite all the bearish noise, Goldman Sachs isn’t backing down on Nvidia (NVDA) stock yet. After another stellar GTC showing, the bank reiterated its $250 price target and maintained a buy rating, underscoring confidence in the AI giant’s tremendous upside from current levels.” Story at…  
Goldman Sachs sends blunt message on Nvidia stock after GTC
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 3 gave Bear-signs and 19 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 +9 to +16 (16 more Bear indicators than Bull indicators), a BULLISH indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread (purple on the chart above) that smooths daily fluctuations reversed higher, a BULLISH sign that is more important than the daily numbers.
 
The S&P 500 made a new high today (Wednesday – again {had a typo here yesterday}). 207 issues on the NYSE made a new-high today; that is above the 5-year average for this stat. Breadth is ok; we don’t need to worry about a correction >10% anytime soon
 
Wednesday was a statistically significant up-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up-day is followed by a down-day about 60% of the time.  Tops almost always occur on Statistically-significant, up-days, but not all statistically-significant, up-days occur at tops. Today could be a short-term top, but there was only 1 top indicator (late-day-action is overbought) that was bearish - not enough to send a strong top-signal.
 
The 10-dMA of Indicator Spread turned positive today.  It last reversed higher at the bottom of the recent correction and again several days before the bottom. I didn’t buy then because the correction has been news-driven and as a retiree my goal is not to lose money. A shift in news could have sent the markets plummeting and a retiree doesn’t have the income to recover losses, so not-losing can be more important than making money.
 
At this point the indicators and war news look better so it is time to add to stock holdings. I don’t want to leap in because of the old “Buy-the-rumor; sell-the-news” adage. When the middle east issues are resolved we might see some selling of the news.
 
For now, I’ll start averaging in. The way the chips have performed and given AMD’s bullish comments, I may add the Semi-Conductor ETF, SOXX as a trade.
 

Is the market headed for an overblown top? Of course it is, but when? The Shiller CAPE (Cyclically Adjusted PE) is now around 40 while the peak was 44 prior to the Dotcom crash in 2000. Since there are now more investors chasing fewer stocks, I think the record high for the CAPE will be exceeded in this cycle.
 
During the Dotcom bust, I sold out of stock positions early in 2000 because of an article in Barrons and Bob Brinker’s Marketimer radio show. I expect to do as well in 2000. This time, I’ll be watching indicators.
 Chart from…
https://www.gurufocus.com/economic_indicators/56/sp-500-shiller-cape-ratio
BOTTOM LINE
I am bullish, but we may see some flattening of the FOMO trade.
 
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
 
WEDNESDAY 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 invested position is about 55% stocks, including stock mutual funds and ETFs. 50% invested in stocks is a normal, conservative position for a retiree. (80% 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 although I don’t trade as much as I used to. 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.