… 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.
 
JEFF BEZOS - NO TRUTH TO THE ‘BUY BORROW DIE STRATEGY (CNBC)
“Amazon executive chairman Jeff Bezos said a controversial tax strategy used by the wealthy to borrow against assets to lower their income taxes is largely a “myth.”
“There’s no truth to this ‘buy, borrow, die’ thing,” Bezos told CNBC’s Andrew Ross Sorkin Wednesday in a wide-ranging interview. “I don’t even know where this comes from.” Story at…
https://www.cnbc.com/2026/05/20/jeff-bezos-taxes.html
 
BUY BORROW DIE (NTSM)
Larry Ellison, former CEO of Oracle, is often mentioned in discussions about the tax strategy. For example, here’s a quote from the internet: “Ellison frequently uses his Oracle stock as collateral for loans to fund his lifestyle rather than selling shares, a strategy that avoids triggering capital gains taxes. [Buy, Borrow, Die strategy] As of 2025 Ellison had about 70-billion in stock collateral pledged as collateral for personal loans.”
 
What they don’t tell you is that much of this is associated with the acquisition of Warner Bros. Discovery by his son's company, Paramount Skydance, but we’ll ignore that for now. Let’s see what happens if Ellison sells a Billion dollars in stock. As a founder of Oracle, his basis would be small so selling stock would trigger large capital gains. If he sold a billion dollars in stock with a basis near zero his tax would be $238-million (23.8% tax rate). If Elison borrowed a Billion dollars at 5% interest for 10-years, 273-million would be paid in interest more than he would save by the Buy-borrow-Die strategy.
 
Maybe it works for a line of credit that is used for short-term loans? I don’t know. There’s always interest on loans. It does keep the Government from getting the money. Does Elisson pay taxes? Yes.
 
Ellison is estimated to own around $200-billion in Oracle stock. Oracle is paying about 1% in dividends now so he would earn about two-billion dollars annually in dividends. High earners pay 20% on the dividends so he would pay $400-million in Federal taxes on the dividends annually.
 
Overall, his tax rate paid is similar to the average tax payer. From the internet, “Analysis of his [Larry Elisson] tax records indicated an average effective federal income tax rate of 21.8% between 2013 and 2018, which is lower than the rate paid by many average income earners relative to his wealth” – Google AI
 “Relative to his wealth” is a misleading statement since taxes are based on income not wealth.
 
BIAS IN THE SUPREME COURT (The Hill)
“…there is more than political advantage at stake. In addition to charges of the justices playing politics, the high court’s permissive approach to partisan redistricting opens the door to real racial division and pain. The civil rights struggle to win equal voting rights for racial minorities and fair representation in Congress is a struggle that goes back to the years following the Civil War.” Story at…
Opinion: Redistricting ruling roils Supreme Court with corruption, bias claims
 
JACKIE ROBINSON MOMENT (The Holl)
“Almost 50 years ago, the U.S. Supreme Court found that racial quotas in university admissions violated the 14th Amendment. The court later declared all racial preferences to be unconstitutional. Yet, for decades, a form of political affirmative action has persisted under the Voting Rights Act, where federal courts required racial gerrymandering to guarantee the election of minority members to Congress.
That ended with the Court’s decision in Louisiana v. Callais, which found that was also unlawful racial discrimination.
The Callais decision brought something long missing from our constitutional jurisprudence: consistency. In 2007, Chief Justice John Roberts wrote that “the way to stop discriminating on the basis of race is to stop discriminating on the basis of race.” Yet for decades, certain forms of racial discrimination were tolerated in the name of diversity or equity. The Callais decision put an end to this pretense and declared all such racial gerrymandering is illegal and discriminatory.” Story at…
Opinion: This is a 'Jackie Robinson moment,' but not the one Hakeem Jeffries thinks it is
 
TRUMP HAS LOST THE GOVERNING PLOT (WSJ-Excerpt)
 

“Republicans don’t want to say this publicly, but privately they do: President Trump’s personal political obsessions are hurting his Presidency, harming the chances for further policy gains the rest of this year, and putting control of the House and Senate in jeopardy…
…That’s the backdrop to the GOP revolt this week in Congress on war powers and funding for the Department of Homeland Security…GOP leaders pulled the entire funding legislation when it appeared they might lose the weaponization vote [Trump’s insistence on his $1.776 billion “anti-weaponization fund” to settle Trump’s lawsuit against IRS] and went home on recess…
..Mr. Trump’s Presidency will be all but over—except for impeachment 3.0—if the GOP loses control of Congress in November…Mr. Trump needs a second-year reset, or he is headed toward a second-term failure.” -The Editorial Board, WSJ. Opinion at…
https://www.wsj.com/opinion/trump-has-lost-the-governing-plot-4879dd64
My cmt: I am a conservative; unfortunately, Trump is not. His Presidency is now, especially due to his ridiculous slush fund proposal, a complete failure. Even in areas where most of the country agreed with him, for example closing the borders and enforcing immigration laws, he has gone completely overboard and managed to exasperate thoughtful voters.
 
TOM LEE TROUBLE IS BREWING FOR WALL STREET (Benzinga)
“I think we’ve already had a bear market in Mag-7 and software.” While those high-flying sectors are expected to remain safe, the same cannot be said for the broader market. “I think there’s going to be a bear market in other stocks later this year,” Lee warned, pointing to headwinds that will squeeze companies that “got lofty.” According to Lee, the market is poised to confront three primary hurdles as the year progresses: typical midterm seasonal volatility, a looming supply overhang from upcoming tech IPO lockup expirations, and a critical energy crunch.” Story at…
https://www.benzinga.com/markets/market-summary/26/05/52765748/tom-lee-says-mag-7-bear-market-is-over-but-trouble-is-brewing-for-rest-of-wall-street-day-of-reckoning
 
QUICK MARKET SUMMARY
-Tuesday the S&P 500 rose about 0.6% to 7519.
-VIX rose about 2% to 17.01. (The Options Players are more concerned than the stock traders.)
-The yield on the 10-year Treasury declined to 4.483% (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, 5 gave Bear-signs and 18 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
What Pullback?
Bollinger Bands and RSI were overbought; 6-Hindenburg Omens; 4-Fosback HI/Low Logic Index Sell signals; 6-bearish MACD signals and we got nothing?
The S&P 500 made a new high - Correction over.
I expected at least a 3-5% retreat, but the Index never declined more than 2% from its all-time high. Where do we go from here?
 
The daily, bull-bear spread of 50-indicators improved from +5 to +13 (13 more Bull indicators than Bear 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 all-time high today, Tuesday. New, all-time highs for the S&P 500 give us an opportunity to check the health of the stock market. Specifically, we look at market breadth to make sure there is plenty of participation across the market.
163 issues on the NYSE made a new-high today; that is slightly below the 5-year average, but still reasonably high. Breadth turned positive - more than 50% of stocks on the NYSE have been up over the last 10-days. These stats show breadth is ok so we don’t need to worry about a correction >10% anytime soon.
 
I’ll wait another day before I commit more $ to the stock market. Since we didn’t get much of a pullback after the top-warning, there is always a concern that stocks may retreat from the new highs. Indicators look good, but I want to be sure that the 10-dMA of the Bull-Bear Spread is moving higher for at least 2 consecutive days.
 
BOTTOM LINE
I am cautiously bullish in the short-term – I’m just following indicators.
 
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

TUESDAY 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 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.