Fed Minutes … 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.
 
TRUMP’S BILLION DOLLAR ‘ANTI-WEAPONIZATION FUND’ (WSJ)
“President Trump, his elder sons, and the family business moved Monday to dismiss their federal lawsuit against the Internal Revenue Service for the leak of Mr. Trump’s tax returns. In exchange, the Justice Department said it will create a $1.776 billion fund to compensate targets of government “weaponization.” Could future historians ask for a better emblem of today’s warped political age?... Mr. Trump’s settlement fund is an astounding precedent, and if it proceeds it is sure to become a highlight reel of Trump Administration payments to Mr. Trump’s friends and allies. Imagine the fun Democrats will have documenting it all between now and 2028 as the worst kind of Washington political payoff.” – Editorial Board, WSJ. Opinion at
https://www.wsj.com/opinion/donald-trump-settlement-fund-doj-irs-todd-blanche-8b1c4303
My cmt: Trump sued the federal government claiming “legal weaponization” by the Biden administration. Now, the Justice Department, an Executive Branch agency whose boss is President Trump, will “settle” the lawsuit by paying off Trump and his cronies!?! Unbelievable! I am speechless.
 
OFFICERS SUE TO BLOCK “WEAPONIZATION” PAYOUTS (AP News)
“Two police officers who helped defend the U.S. Capitol from an attack by a mob of President Donald Trump’s supporters sued on Wednesday to block anyone — including Jan. 6, 2021, rioters — from receiving payouts from a new $1.776 billion settlement fund for people who claim to be victims of politically motivated prosecutions.” Story at…
https://apnews.com/article/irs-trump-settlement-tax-returns-police-capitol-riot-fc73eb5f35481bb6d8892ac1e14e98bd
 
DEMOCRATS DON’T FIGHT FIRE WITH FIRE (WSJ)
“I have an Article II, where I have the right to do whatever I want as president.” – President Trump.
“In order for us to correct the abuses that are happening now, we have to act the same in similar capacities that Trump has given himself,” - Rep. Alexandria Ocasio-Cortez (D., N.Y.)
“Donald Trump has made clear that there are no guardrails on executive power that are effective. So, the idea that the next president somehow just doesn’t pick up the tools and use them to execute on the policies that they run on makes no sense… We can’t play the game that Republican presidents get lots of power and Democratic presidents don’t.” - Elizabeth Warren (D., Mass.)
… But as we fight fiercely among ourselves, none of us are really winning. Only our foreign adversaries are. The national interest requires what I am convinced most Americans really want—a time of healing, when we relearn the ancient truth that what unites us is more important than what divides us.” Opinion at…
https://www.wsj.com/opinion/democrats-dont-fight-fire-with-fire-6c0f48fd
My cmt: They won’t listen to reason. Democrats are planning their revenge.
 
FED MINUTES (CNBC via msn)
“A majority of Federal Reserve officials at their most recent meeting anticipated that interest rate increases would be necessary if the Iran war continued to aggravate inflation, according to minutes released Wednesday.” Story at…
Fed officials see rate hike ahead if inflation stays elevated, minutes show
 
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.9 million barrels from the previous week. At 445.0 million barrels, U.S. crude oil inventories are about 2% below the five-year average for this time of year.” Report at…
https://www.eia.gov/petroleum/supply/weekly/
 
QUICK MARKET SUMMARY
-Wednesday the S&P 500 rose about 1.1% to 7433.
-VIX declined about 3.4% to 17.44.
-The yield on the 10-year Treasury declined to 4.585% (compared to about this time prior market day).
 
MY TRADING POSITIONS
NVDA – Added 12/1/2025 & 2/6/2026
“According to the 54 analysts' twelve-month price targets for NVIDIA, the average price target is $278.73. The highest price target for NVDA is $360.00, while the lowest price target for NVDA is $205.00.”- MarketBeat at… 
https://www.marketbeat.com/stocks/NASDAQ/NVDA/forecast/
5/20/26: Nvidia beats on revenue and guidance, adds $80 billion to buyback plan.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 13 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
Pullback Data:
-Days since the top: 4
-Drop from the Top: 0.9%
-% above the 50-dMA: 6.8%
-% above the 200-dMA: 9.4%
 
The daily, bull-bear spread of 50-indicators declined from zero to -2 (2 more Bear indicators than Bull indicators), a NEUTRAL 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 continued down, a BEARISH sign that is more important than the daily numbers.
 
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.  There was a statistically significant, down-day three days ago. Today’s back and forth action is the type of action one sees during pullbacks, still, today’s move doesn’t say much for the prospects of correction.
 
The Fosback Short-Term Hi/Low Index is still flashing sell today, Wednesday. As noted yesterday, this is a reliable indicator.
 
Wednesday, there was another Hindenburg Omen.
Hindenburg Omens don’t have a great record of being correct; however, they do tend to give a good signal if there is a cluster of Omens. We’ve seen 6 in the last 8 days.
 
Breadth remains weak; only 45.8% of issues on the NYSE have been up over the last 2 weeks. For now, longer term breadth values are still ok.
 
Breadth, as measured by issues advancing on the NYSE, was ok at the top so that suggests that if we do see a correction that it would be less than 10%. On the low side, pullbacks of 3% to 5% are normal and happen all the time. Indicators are still neutral so the guess now is that we are likely to see a small correction. 
 
BOTTOM LINE
I am bearish in the short-term, still expecting a relatively small pullback.
 
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 remained SELL. (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 50% 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.