Jobless Claims … Productivity … 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.
 
JOBLESS CLAIMS / PRODUCTIVITY (Reuters)
“The number of Americans filing new claims for unemployment benefits slipped to a 57-year low last week, pointing to labor market resilience, though uncertainty over the drawn-out conflict in the Middle East is constraining hiring… Other data from the Labor Department on Thursday showed stronger-than-expected growth in worker productivity in the third quarter. The surge ​in productivity depressed labor costs for the first time in more than a year and reinforced views of policymakers and economists that the labor market was not a source of inflation.” Story at…
https://www.reuters.com/business/world-at-work/us-weekly-jobless-claims-57-year-lows-amid-low-layoffs-2026-11-05/
My cmt: Initial claims were 189,000; non-farm productivity was 3.6% higher year-over-year.
 
QUICK MARKET SUMMARY
-Thursday the S&P 500 fell about 4.4% to 7354.
-VIX jumped about 70% to 28.18.
-The yield on the 10-year Treasury declined to 4.831% (compared to about this time most recent trading day).
 
MY TRADING POSITIONS
NVDA – Added 12/1/2025, 2/6/2026 & 8/3/2026. Reduced position 10/7/2021
XLK – Added 6/5/2026.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 18 gave Bear-signs and 8 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

Today was down all day.
 
Where is the S&P 500?
          - 5.9% below its all-time high
          - 4.3% below its 50-dMA
          - 3.5% below its 100-dMA
          - 0.4% above its 200-dMA
 
The daily, bull-bear spread of 50-indicators declined from +4 to -10 (10 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, reversed lower, a BEARISH sign. (The 10-day has been bouncing back and forth so it’s hard to place too much faith in it.)
 
Is this the end of the Bull market? It could be, but it doesn’t fit the classic stock market wisdom:
"Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria." — Sir John Templeton
 
We haven’t been in euphoria at all this year. Another cause for an end of a bull market is recession, but there is currently no sign of recession. That’s not a great sign though. Similar statements were made in 2007 when the recession had already begun. Recessions are officially determined by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) so start dates are usually determined after-the-fact.
 
Statements by Democrats have been generally opposed to AI. Partly due to their opposition, the AI trade is getting crushed. The iShares A.I. Innovation and Tech Active ETF (BAI) was down 11% Thursday. Nvidia is down almost 25% in just a month. Overall, my indicators aren’t that bad, but there are some reliable signs that are scary.
 
The 10-dEMA Hi/Lo Logic Index was bearish Thursday. In addition, the Short-Term (5-day) Hi/Lo Logic Index was “very bearish” according to Fosback’s original description of the 5-day indicator. The 10-day version of this indicator called the Covid-19 Bear Market high to the day.              
 
Breadth has weakened again.
 
My Panic Indicator flashed. This one is hard to interpret, because it can be either a buy-signal or a sell-signal. It’s a buy signal at a bottom and a sell signal at a top. Where are we this time? Well, the market was close to a top, but markets have been in a sideways correction since early August so one can make an argument markets are near a bottom. I’ll put this indicator in the bear camp – the S&P 500 was only 1.5% below its all-time high yesterday (Wednesday).
 
There were a few signs of a bottom.
The 7-Day VIX ROC (rate of change) was 61%: According to Tom McClellan "...any reading above around +20% is a pretty good sign of an oversold bottom for stock prices, one that is worthy of a bounce...” This one is not in my 50-indicator ensemble, because I have never back-tested it to check its accuracy.
 
Bollinger Bands are overbought, but RSI is not confirming a bottom and I use these indicators together.
 
As I’ve written before, in my experience, when leaders fail, markets fail.
 
BOTTOM LINE
I’m Bearish and inclined to ere on the side of caution and cut some stock holdings. I’ll try and post tomorrow if I make changes to the portfolio. It is likely to be late in the day.
 
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
 
THURSDAY MARKET INTERNALS (NYSE DATA)-

My basket of Market Internals declined to 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 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.