Navigate the Stock Market

Tuesday, March 25, 2025

Consumer Confidence ... New Home Sales .. Richmond FED Manufacturing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators improved to a Bullish +10 (10 more Bull indicators than Bear indicators). The 10-dMA of the spread improved again – another bullish sign. Indicators are popping higher. The Index is 0.4% above its 200-dMA and has closed above the 200-day on consecutive days. That’s a good sign.

All the signs seem to suggest the correction is over and we have seen the lows. However, I am finding it hard to believe, given all the Trump tariff-talk, DOGE antics and real Russian collusion (Trump has taken the Russian side over the Ukrainians).

The S&P 500 has retraced 40% of its losses from the all-time high back on 19 February. That’s slightly above the 38% Fibonacci retracement level, but there are Fibonacci levels at 50% and 62% so the Fibonacci stuff has never appealed to me. The most likely retracement level before a return to the lows is around 50%; it is very possible that markets will retest the lows around 5520. Because of those concerns, I decided to sell my leveraged positions in SSO (2x S&P 500 ETF) for a small profit and swap it for a position in SPY (S&P 500 ETF). Leveraged positions are painful in any kind of downturn. I can always add SSO later.

BOTTOM LINE
I am cautiously bullish. Indicators suggest the correction is over, but I have my doubts.

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 remained BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

...My current invested position is about 50% stocks, including stock mutual funds and ETFs. 50% invested in stocks is a normal position. (75% 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. 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.

Monday, March 24, 2025

National Activity 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.

TRUMP, DEPORTATIONS (WSJ)
“Americans won’t miss the Venezuelan and MS-13 gang members dispatched by the Trump Administration to El Salvador on the weekend. Most of them are criminals who were in the U.S. illegally. But it’s still troubling to see U.S. officials appear to disdain the law in the name of upholding it.
President Trump ordered the deportation of nearly 300 alleged members of Venezuela’s Tren de Aragua gang, as well as several from MS-13, the ruthless Salvadoran gang. They were apparently deported without a hearing in an immigration court, much less a criminal conviction... The Administration invoked the Alien Enemies Act of 1798 to justify the deportations without need for due process. That law has rarely been used in U.S. history and not since World War II....“They’re not gonna stop us,” Tom Homan, Mr. Trump’s immigration czar, told Fox News on Monday. “We’re not stopping. I don’t care what the judges think, I don’t care what the left thinks, we’re coming.” Elon Musk threatened Judge Boasberg with impeachment, and the MAGA-sphere chanted that Mr. Trump should ignore the courts. Are we already arriving at a constitutional impasse when the Administration thinks it can ignore court orders?” – WSJ Editorial Board at...
https://www.wsj.com/opinion/trump-deportations-gang-members-james-boasberg-tom-homan-nayib-bukele-ms-13-tren-de-aragua-6e377106?mod=commentary_trendingnow_article_pos2

NATIONAL ACTIVITY INDEX (WSJ)
“The index’s three-month moving average by contrast increased to 0.03 in January from minus 0.13 in December. The CFNAI diffusion index—which captures how much the change in the monthly index is spread among the indicators over three months—similarly increased, reaching 0.10 from minus 0.07 a month earlier. Periods of economic expansion have historically been associated with values of the CFNAI diffusion index above minus 0.35.” Story at...
https://www.wsj.com/economy/u-s-economic-growth-falls-back-below-average-02120246

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Monday the S&P 500 rose about 1.8% to 5768.
-VIX fell about 9% to 17.48.
-The yield on the 10-year Treasury rose to 4.338% (compared to about this time prior market day).

MY TRADING POSITIONS:
SSO added 3/24/2025
XLK added 3/24/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 6 gave Bear-signs and 13 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 improved to a Bullish +7 (7 more Bull indicators than Bear indicators). The 10-dMA of the spread improved again – another bullish sign. The spread was +9 around mid-day today, but breadth declined a little and flipped one of my breadth indicators back to the bear side.

The 50-Indicator Ensemble is suggesting the correction is over. There were other signs too. The low (so far) was on 13 March. The day after the bottom, there was a 90% up-volume day that finished on high momentum. The following day there was another high-volume day with 87% up-volume. Even though the 2^nd day dd not have strong momentum into the close, the two back-to-back days are a bullish sign.

Still, I am left with the problem that the S&P 500 may still need to retest the low. The low on 13 March (7 trading session ago) was on lower volume than the previous low, but market internals didn’t improve appreciably. That suggests that a retrace to the 5525 level is still possible and I think it will re-test the lows; but I am following the indicators, not what I think. I am cautiously bullish.

Monday 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.

BOTTOM LINE
I moved to a 50% invested position today, 24 March. Investors are more bullish and that has pushed indicators to the bullish side.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals reversed to BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Time to Add to Stock Positions

The Bull minus Bear Indicator spread improved a lot today – up from -4 to +9 on a preliminary, mid-day basis. The S&P 500 looks like it will close above our line in the sand, the recent high at 5675, and Breadth was up across the board.

I am adding to stock positions so that my stock positions will make up 40 or 50% of the total portfolio. 50% is a fully-invested position for me, although I am frequently invested at a higher stock percentage when conditions look good. Now there are enough questions that I will not go all in.

We could still see a retest of the low of 5521 (7-days ago). Even moderate corrections can take a long time to fully resolve. In 2018 we had a 10% correction that retested the low over a month later. For now, there are enough positive signs to support being fully-invested.

Friday, March 21, 2025

Leading Economic Indicators ... Philly Fed ... Jobless Claims ... Existing Home Sales ... 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.

TARIFF FLEXIBILITY (CNBC)
“’I don’t change. But the word flexibility is an important word,” he [Trump] said. ‘Sometimes it’s flexibility. So there’ll be flexibility, but basically it’s reciprocal’...Trump and his officials say the plan will effectively assign tariff rates to all countries that have their own tariffs on U.S. goods. Countries with other non-tariff trade policies that the Trump administration opposes, such as value-added taxes, could also be subject to new duties.” Story at...
Https://www.cnbc.com/2025/03/21/trump-says-therell-be-flexibility-on-reciprocal-tariffs.html

PHILLY FED (RTT News)
“ A report released by the Federal Reserve Bank of Philadelphia on Thursday said regional manufacturing activity expanded overall but was less widespread in the month of March. The Philly Fed said its diffusion index for current general activity slid to 12.5 in March after plunging to 18.1 in February, although a positive reading still indicates growth. Economists had expected the index to slump to 8.5.” Story at...
https://www.nasdaq.com/articles/philly-fed-index-drops-less-expected-march

JOBLESS CLAIMS
U.S. jobless claims filings rose by 2,000 to 223,000 for the week ending March 15, the Labor Department said Thursday. That’s just less than the 224,000 new applications analysts forecast... U.S. jobless claims filings rose by 2,000 to 223,000 for the week ending March 15, the Labor Department said Thursday. That’s just less than the 224,000 new applications analysts forecast.” Story at...
https://apnews.com/article/unemployment-benefits-jobless-claims-layoffs-labor-571954a7ed9bd2966ada9360ea8ad83f

EXISTING HOME SALES (NA)
“Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – progressed 4.2% from January to a seasonally adjusted annual rate of 4.26 million in February. Year-over-year, sales slid 1.2% (down from 4.31 million in February 2024). ‘Home buyers are slowly entering the market,’ said NAR Chief Economist Lawrence Yun. ‘Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand.’” Story at...
https://www.nar.realtor/newsroom/existing-home-sales-accelerated-4-2-in-february

LEADING ECONOMIC INDEX (Conference Board)
“The US LEI fell again in February and continues to point to headwinds ahead,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “Consumers’ expectations of future business conditions turned more pessimistic. That was the component that weighed down most heavily on the Index in February... the LEI’s six-month and annual growth rates, while still negative, have remained on an upward trend since the end of 2023...we currently forecast that real GDP growth in the US will slow to around 2.0% in 2025.” Press release at...
https://www.conference-board.org/topics/us-leading-indicators

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Friday the S&P 500 rose about 0.1% to 5668.
-VIX fell about 3% to 19.28.
-The yield on the 10-year Treasury was little changed at 4.245% (compared to about this time prior market day).

MY TRADING POSITIONS:
None

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 12 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
Currently, the weakness has lasted 22 sessions; the S&P 500 currently has a 7.8% drop from the top and the Index is 1.4% below its 200-dMA. While the S&P 500 finished up slightly today, internals were weak – decliners outpaced advancers by nearly 2 to 1 as did down-volume vs up volume. New-highs had been improving, but they were outpaced by new-lows by almost 4 to 1.

The President’s “flexibility” comment (see above) boosted markets late in the day (according to the pundits). Perhaps, but that doesn’t seem different than what we have seen – a lot of negotiation and tariff delays. We already had flexibility, so it’s hard to feel confident that investors are suddenly ok with tariffs.

The daily, bull-bear spread of 50-indicators remained Neutral, but declined to -4 (4 more Bear indicators than Bull indicators). The 10-dMA of the spread improved again – a bullish sign.

The S&P 500 has not yet managed to break out of its double-top at 5675. Investors seem confused and today’s unchanged volume would confirm that assessment – it was very high.

I’m still waiting for investors to make up their minds about the market – should I stay or should I go?

As I suggested previously, I think a close above 5675 should probably be bought. If it appears a close above 5675 is in the cards, I would add to stock holdings, but not go all in. I might boost stock holdings to around 40-50%. A retrace to the 5525 level is still possible.

BOTTOM LINE
No bottom call yet. I am Neutral on the market with a very conservative allocation of only about 30% invested in stock holdings. 30% may be too conservative and I will add to stocks as noted above.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals reversed to SELL. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

...My current invested position is about 30% stocks, including stock mutual funds and ETFs – extreme bearish. (I’ll need to recalculate the %.) 50% invested in stocks is a normal position. (75% 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. 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.

Thursday, March 20, 2025

Stock Market Analysis - Quick Update

It’s been a busy day so I’ll just do a quick update...

No change from yesterday: On Thursday, of the 50-Indicators I track, 11 gave Bear-signs and 9 were Bullish. The rest are neutral.

The daily, bull-bear spread of 50-indicators remained Neutral, at -2 (2 more Bear indicators than Bull indicators). The 10-dMA of the spread improved again – a bullish sign.

I don’t see a bottom yet, although as we noted before there have been weak bottom signals. Still, I’ll be on Hold until the S&P 500 closes above 5675 or I see a clear bottom signal.

Wednesday, March 19, 2025

Fed Rate Decision ... Crude Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

I MAY NOT BE ABLE TO POST THURSDAY – IT’S A BUSY DAY.

“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.

“The trouble with trade wars is that once they begin they can quickly escalate and get out of control. All the more so when politicians are nearing an election campaign, as Canada now is. Or when Mr. Trump behaves as if his manhood is implicated because a foreign nation won’t take his nasty border taxes lying down. We said from the beginning that this North American trade war is the dumbest in history, and we were being kind.” – WSJ Editorial Board.

FED RATE (CNN)
“The Federal Reserve on Wednesday kept interest rates unchanged... Officials still expect to trim borrowing costs twice this year, according to their latest economic projections released Wednesday, though eight officials are predicting one or no cuts this year, compared to only four who expected that in December... Fed policymakers also expect the economy to be weaker this year than previously thought, according to the projections. They also forecast inflation to be higher this year.” Story at...
https://www.cnn.com/2025/03/19/economy/fed-rate-decision-march/index.html

CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.7 million barrels from the previous week. At 437.0 million barrels, U.S. crude oil inventories are about 5% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Wednesday the S&P 500 rose about 1.1% to 5675.
-VIX fell about 8% to 19.9.
-The yield on the 10-year Treasury declined to 4.246% (compared to about this time prior market day).

MY TRADING POSITIONS:
None

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 11 gave Bear-signs and 9 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
I wrote yesterday that I hoped the market would make a lower-low Wednesday so I could get a clearer idea of where the markets are headed. I didn’t want to see the S&P 500 close above its recent high of 5675. Well, it didn’t, but it came as close as possible. Today, the S&P 500 closed at 5675 forming a small double-top formation.

The daily, bull-bear spread of 50-indicators remained Neutral, but improved to -2 (2 more Bear indicators than Bull indicators). The 10-dMA of the spread improved again – a bullish sign.

The Bull-Bear spread did change last night; the Sentiment numbers for the Rydex/Guggenheim Bull/Bear analysis never made it to the bear threshold. Sentiment turned sharply bullish on Tuesday at the close. The final spread yesterday was -4. (Both final volume and Sentiment numbers are not available until late in the evening.)

The S&P 500 is back to its 25% retracement level, slightly more than the 23.6% first Fibonacci retracement value, for those who believe in that sort of thing. The Index closed 1.2% below its 200-dMA Wednesday.

Where do markets go from here? The analysis is mixed: price action appears bullish; indicators are mostly neutral, but the 10-dMA is bullish; we got a weak, Buy-signal on 6 March when the S&P 500 was 5739. The S&P 500 is at a critical double-top; as I suggested previously, I think a close above 5675 should probably be bought. If it appears a close above 5675 is in the cards, I would add to stock holdings, but not go all in. I might boost stock holdings to around 40-50%. A retrace to the 5525 level is still possible.

BOTTOM LINE
No bottom call yet, but we may not get one this time around. Given the indicator improvement I am Neutral on the market with a very conservative allocation of only about 30% invested in stock holdings. 30% may be too conservative given the recent price action and I will add to stocks as noted above...when I get the chance (maybe Friday).

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

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.)

Tuesday, March 18, 2025

Housing Starts ... Industrial Production ... 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.

“The trouble with trade wars is that once they begin they can quickly escalate and get out of control. All the more so when politicians are nearing an election campaign, as Canada now is. Or when Mr. Trump behaves as if his manhood is implicated because a foreign nation won’t take his nasty border taxes lying down. We said from the beginning that this North American trade war is the dumbest in history, and we were being kind.” – WSJ Editorial Board.

“For more than two centuries, it has been established that impeachment is not an appropriate response to disagreement concerning a judicial decision. The normal appellate review process exists for that purpose.” – Chief Justice John Roberts in response to Trump’s post to impeach the deportation judge, James E. Boasberg.

PRESIDENTIAL CYCLE DEVIATIONS (McClellan Financial Publications)
“...an incumbent who wins typically does not spend much time blaming his predecessor for things being bad, and so the stock market generally performs better in the first year of a president's second term than with a new president. Eventually the performance all equals out later in the terms of each type of president, but for a while there is a significant difference, on average.
We are now seeing an even more significant difference thanks to President Trump's actions on international trade. Because traders have never lived through a set of changes like what we are seeing now, it makes people uncomfortable because they do not know what to think about it. So they sell their stocks and seek the safety of cash to assuage their uncertainty. That is a normal human reaction.” – Tom McClellan. Commentary at...
https://www.mcoscillator.com/learning_center/weekly_chart/deviation_from_the_presidential_cycle_patterns/
My cmt: The point of the commentary was to note that the usual Presidential Cycle is not a good market predictor this time.

RISK OF RECESSION RISING (CNBC)
“Respondents to the March CNBC Fed Survey have raised the risk of recession to the highest level in six months, cut their growth forecast for 2025 and hiked their inflation outlook... The outlook for the S&P 500 declined for the first time since September. The 32 survey respondents, who include fund managers, strategists and analysts, raised the probability of recession to 36% from 23% in January.
https://www.cnbc.com/2025/03/18/slower-economic-growth-is-likely-ahead-with-risk-of-a-recession-rising-according-to-the-cnbc-fed-survey.html

HOUSING STARTS / PERMITS (Yahoo Finance)
“Single-family housing starts, which account for the bulk of homebuilding, surged 11.4% to a seasonally adjusted annual rate of 1.108 million units last month... Permits for future construction of single-family housing fell 0.2% to a rate of 992,000 units in February.”
https://finance.yahoo.com/news/us-housing-starts-rebound-strongly-124156741.html

INDUSTRIAL PRODUCTION (MarketWatch)
“Industrial production rose 0.7% in February, the Federal Reserve reported Tuesday.
The gain was above economists’ expectations for a 0.3% rise, according to a survey by the Wall Street Journal.” Story at...
https://www.marketwatch.com/story/industrial-output-jumps-0-7-in-february-fueled-by-auto-production-c11fe65d

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Tuesday the S&P 500 fell about 1.1% to 5615.
-VIX rose about 6% to 21.70.
-The yield on the 10-year Treasury declined to 4.285% (compared to about this time prior market day).

MY TRADING POSITIONS:
None

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 11 gave Bear-signs and 9 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 improved to a Neutral -2 (2 more Bear indicators than Bull indicators). The 10-dMA of the spread improved again – a bullish sign. The numbers may change tonight when we get the Sentiment numbers for the Rydex/Guggenheim Bull/Bear analysis. Sentiment is very close to overly bearish and that would be a bullish sign, if the {bull/(bulls+bears)} sentiment deteriorates. It doesn’t make much difference – another bull-sign still would leave the indicators in a Neutral position, but Sentiment is one of those important indicators that suggest markets are closer to a bottom. There were Sentiment buy-signals both before (several % early) and after the bottom of the 10% correction in October 2023.

The S&P 500 retraced 25% of its losses as of the close Monday, slightly more than the 23.6% first Fibonacci retracement value, for those who believe in that sort of thing. The Index closed 2.2% below its 200-dMA Tuesday.

Unchanged-volume was very high today. As I’ve often said (and you’re probably tired of reading it), many believe that this indicator suggests investor confusion at market turning points. Are markets turning back up? It’s always possible, but the best we can say is that investors are confused, as one would expect in a acorrection. “High-unchanged-volume” is not one of my indicators because it is often wrong.

I hope the market will make a lower-low so I can get a clearer idea of where the markets are headed. I’d rather not see the S&P 500 close above its recent high of 5675. That would leave me in doubt and might suggest “correction over,” but I wouldn’t have the data to back up any conclusion.

BOTTOM LINE
No bottom call yet. Given the indicator improvement I am Neutral on the market with a very conservative allocation of only about 30% invested in stock holdings.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained HOLD. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)