Housing Index … 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.
 
“A Democratic city council member who once welcomed the "change" from socialist Seattle Mayor Katie Wilson is now admitting he is "gravely concerned" about the business exodus affecting the major American city.
This comes as blue states like Washington and New York face a business exodus in favor of more market-friendly red states. Starbucks, a major player in Seattle’s business scene, recently announced a major expansion into Nashville while simultaneously cutting Seattle-based corporate jobs, a move that has intensified concerns about Seattle’s business climate and economic competitiveness.” Story at…
Dem who welcomed socialist mayor's 'change' now sounding alarm over billionaire exodus: 'Gravely concerned'
 
CLEANING HOUSE AT CITY HALL (Secret Life of Mom)
“When the Festus City Council approved a $6 billion AI data center on March 30, 2026, it probably expected a degree of community frustration. What happened next exceeded any reasonable expectation. Eight days later, every one of the four incumbent council members up for reelection had been thrown out of office by voters running specifically on opposition to the project.” Story at… 
Town votes out every council member who approved a $6 billion AI data center
 
WE’RE ALL IN DEBT – HOW WILL THE US ECONOMY FUNCTION IF GLOBAL LENDING DRIES UP (Moneywise)
“What happens when the world stops lending to the United States? That's the question raised by economist and gold advocate Peter Schiff in a recent appearance on The Iced Coffee Hour, where he laid out a stark warning about the foundation of the American economy…"When the world doesn't do that, what do we got?" Schiff continued, "How does this economy function?"
Schiff has recently been vocal in his warnings about the direction of the U.S. economy. Just a couple of weeks ago, he wrote on X that, "We are headed for a full-blown financial crisis." Story at… 
We're all in debt: Peter Schiff questions how the US economy will function if global lending dries up — here's what it means for investors
 
LOW HIRING (Moneywise-Thursday)
“CNBC's Rick Santelli could hardly hide his surprise when the latest U.S. jobs data hit the wire. [Thursday – They were low.] "That is truly incredible. We're looking at levels truly that we probably haven't seen since the late '60s. This is very, very incredible."
He wasn't exaggerating the scale of the move. According to the Department of Labor, seasonally adjusted initial claims fell to 189,000 for the week ending April 25, down 26,000 from the previous week's revised level of 215,000…
…Bloomberg reported that the figure marked the lowest level since 1969. Economists had expected 212,000 claims — meaning the actual number came in far below forecasts.” Story at…
'Wow!': CNBC host stunned as 'truly incredible' US jobs number plunges to 189,000 — the lowest level since 1960s. Time to bet on Trump's economy?
My cmt: I commented at the time that this number was below levels needed to employ new hires entering the market. I didn’t realize that it was historically low.
 
NAHB HOUSING INDEX (advisor Perspectives)
“Builder confidence posted a modest gain in May despite persistent affordability challenges and economic uncertainty. The National Association of Home Builders (NAHB) Housing Market Index (HMI) rose 3 points from April to 37 this month, marking the 25th consecutive negative reading. The latest reading was higher than the forecast of 34.”

Analysis and charts at…
https://www.advisorperspectives.com/dshort/updates/2026/05/18/nahb-housing-market-index-builder-confidence-may-2026
 
QUICK MARKET SUMMARY
-Monday the S&P 500 declined about 0.1% to 7403.
-VIX declined about 3% to 17.82.
-The yield on the 10-year Treasury declined slightly to 4.593% (compared to about this time prior market day).
 
MY TRADING POSITIONS
SPY – Added 12/1/2025. – SOLD 5/18/2026
I sold SPY just to cut back on stocks a bit. This takes me back to about fully invested at about 50% in stocks.
 
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.” – 11 May. Story at…  
Goldman Sachs sends blunt message on Nvidia stock after GTC
“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/
 
SSO – Sold 5/14/2026.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 11 gave Bear-signs and 12 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 from +1 (1 more Bull indicator than Bear 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 reversed higher, a BULLISH sign that is more important than the daily numbers.
 
I still expect a pullback in the 3-5% range. It could go higher, but the 50-dMA was 8.6% below the S&P 500 when it made its high on Thursday.  It is now 6.8% above the 50-day. Those are the likely max declines unless we get further bad news.
 
Monday, there was another Hindenburg Omen.
“The Hindenburg Omen is a technical analysis indicator that attempts to predict stock market crashes by identifying periods of market instability. It is named after the Hindenburg disaster, a German airship that caught fire in 1937. The omen is triggered when specific market conditions, such as a large number of stocks making both new 52-week highs and lows, occur within a short time frame.” – Investopedia.
 
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 4 in the last 6 days. The short-term Fosback High-Low Logic Index uses a similar method of analysis. It is very close to issuing a sell-signal too.
 
Breadth is weak; only 49% 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. 
 
The S&P 500 is 6.8% above its 50-dMA.
 
BOTTOM LINE
I am bearish in the short-term 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

MONDAY 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.