Inflation … GDP … ADP Employment … Chicago PMI … 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.
 
LETTER TO EDITOR WSJ (WSJ)
“The decision to invite Vladimir Putin to the upcoming G-20 summit demands a unified, uncompromising response from the international community (“Trump Gives Putin Another Blessing,” Review & Outlook, Sept. 26). The invitation is an insult to the civilized world.
We have seen this spineless script before. In 1938, British Prime Minister Neville Chamberlain returned from Berlin waving a worthless piece of paper signed by Hitler, naively promising “peace for our time.” History has already shown us the cost of accommodating aggressive tyrants. That pathetic appeasement didn’t prevent war; it fueled a monster.
Sitting at a table with Mr. Putin today repeats that exact mistake. Normalizing a war criminal under the guise of global diplomacy is cowardice. The only acceptable response is a total boycott. Paralyze the summit, expose the tyrant and let him talk to himself.” - Jessica Korzenecki, WSJ Opinion at…
https://www.wsj.com/opinion/dont-turn-the-g-20-into-a-victory-lap-for-the-kremlin-1e0fae21?mod=letterstoeditor_article_pos9
 
ADP EMPLOYMENT (ADP)
“Private employers added 90,000 jobs in September. Hiring accelerated for the first time since May, led by education and health care and leisure and hospitality. Financial activities and professional and business services showed weakness. "It's a strong report. After a three-month slowdown, job creation rebounded and pay growth remained solid." - Dr. Nela Richardson, Chief Economist, ADP.” Report at…
https://adpemploymentreport.com/
 
GDP – FINAL (CNN)
“Gross domestic product grew at a 2.2% inflation-adjusted annualized pace in the second quarter, a sharper rebound than the 1.5% rate previously estimated as stronger consumer spending and business investment helped power growth." Story at...
https://www.cnn.com/2026/09/30/economy/us-economy-gdp-q2-final
 
PCE PRICES - FINAL (CNBC)
“The August personal consumption expenditures price index, the Fed’s main inflation gauge, saw an increase of 3.4% on headline and 3% for core, both well below estimates.” Story at…
https://www.cnbc.com/2026/09/30/feds-preferred-gauge-showed-core-inflation-at-3point0percent-in-august-much-lighter-than-expected.html
My cmt: The CME Group Fed Watch tool placed the odds of a rate hike at 37% at the next Fed meeting on 28 October.
 
CHICAGO PMI (Sharecast)
“The ISM-Chicago purchasing managers' index, which tracks business conditions across Illinois, Indiana and Michigan, surged to 58.8 last month, well ahead of the 47.1 print recorded in August. This was comfortably above the consensus forecast of 51.2 and the highest rate of expansion…since May.” Story at…
https://www.sharecast.com/amp/news/international-economic/chicago-pmi-smashes-forecasts-to-hit-four-month-high--23718732.html
 
QUICK MARKET SUMMARY
-Wednesday the S&P 500 declined about 0.3% to 7652.
-VIX rose about 2% to 16.34.
-The yield on the 10-year Treasury rose to 5.302% (compared to about this time prior market day).
 
MY TRADING POSITIONS
QLD – Added 5/28/2026
NVDA – Added 12/1/2025, 2/6/2026 & 8/3/2026
XLK – Added 6/5/2026
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 20 gave Bear-signs and 6 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
 

Ugly chart and the S&P 500 closed at its low, but that was on its 50-dMA. The 50-day is usually a good level of support, so we’ll hoper the markets are at a short-term bottom.
 
The daily, bull-bear spread of 50-indicators declined from -12 to -14 (14 more Bear indicators than Bull indicators), a BEARISH 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 higher (but just barely), a BULLISH sign.
 
Rinse and repeat; the following looks like the past several days.
Our conclusion hasn’t changed. The 10-day spread is still bullish, even if it is just barely.  We also note that the index remains within in its upward moving channel (red lines in the above chart) so there is no point in getting too concerned. The S&P 500 is at its 50-dMA and only 1.9% below its all-time high.
 
Breadth remains weak whether measured by advancing issues or new-highs.
 
As noted yesterday, only 7 days have been up in the last month and that is an oversold signal. The 5-day, Ultra-Short-term, Fosback Hi/Lo Logic Indicator continues to signal “Buy,” a probable bottom signal.  But it is only one bottom indicator that is bullish.  Others have not yet signaled “BUY” and they may not since there hasn’t been much of a bottom yet. I’ll wait for more bullish signs before adding to stock holdings.
 
BOTTOM LINE
I’m cautiously bullish, but a drop below the 50-dMA will change that.
 
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 HOLD. (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 60% 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.