Navigate the Stock Market

Tuesday, October 21, 2025

Shiller CAPE ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“The [above] chart compares the CAPE ["Cyclically Adjusted P/E Ratio"] to a measure of 10-year forward price returns for the SP500 (dividends not included). I have inverted the scaling on that plot of forward returns to better show the strong correlation. And the plot of forward returns ends in 2015 because the market has not yet told us what the 10-year forward returns after then are going to look like... The big peaks in CAPE in 1929 and 2000 led to instances of negative 10-year returns. So did the lesser CAPE peak in 1965...
... This means that the potential for a buy and hold approach working well over the next 10 years is going to be pretty low.” – Tom McClellan. Excerpted from....
https://www.mcoscillator.com/learning_center/weekly_chart/shillers_cape_at_very_high_level/
My cmt: That’s the point of this blog. I won’t be holding during a downturn and the indicators have been very good at identifying tops. We can hope that the trend of correct calls at major tops will continue. Unfortunately, there are no guarantees.

“Harley Schwadron is a cartoonist in Ann Arbor, Michigan. His cartoons have appeared in many major publications, including Barron’s, Harvard Business Review, Punch, Playboy, American Legion, New York Times, and Readers Digest. Many of Harley's cartoons deal with business, politics and financial investing. He has illustrated some 50 books.” From...
Political Cartoons From Harley Schwadron

TIME RUNNING OUT ON HEALTH SUBSIDIES – Excerpt (WSJ)
“The window for extending billions of dollars in Americans’ healthcare subsidies is closing rapidly. Enhanced Affordable Care Act subsidies are set to end after this year unless Congress acts, and open enrollment for insurance next year By Lindsay Wise, Anna Wilde Mathews and Katy Stech Ferek starts next month. Democrats have demanded that Republicans negotiate on extending the subsidies as a condition for ending the government shutdown, now in its third full week.” – WSJ Front Page.
https://www.wsj.com/public/resources/documents/94xXfOHegeoeeh4wpCBm-WSJNewsPaper-10-20-2025.pdf
My cmt: Payments to Health Insurers’ (subsidies) were designed to lower health care premiums during COVID in the Obama Care insurance programs. The subsidies were not intended to be permanent. They expire after 2025. (Not already expired as I recently mentioned.) But Politicians hate to take away any benefit once established. So far Republicans haven’t blinked as the Democrats try to blame Republicans for the shutdown.

LEADING ECONOMIC INDICATORS (Conference Board)
While not a government institution, the Board is not able to publish the LEI due to the lack of Government data.

MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was unchanged at 6735.
-VIX fell about 2% to 17.87.
-The yield on the 10-year Treasury declined to 3.963% (compared to about this time prior market day).

MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 6 gave Bear-signs and 15 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 from -1 to +9 (9 more Bull indicators than Bear indicators), a Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it reversed higher, a Bullish sign.

It looks like the market is improving beneath the surface of the major indices. Absent further Tariff turmoil, I’ll add to stock holdings...slowly. Further, I’ll wait for the S&P 500 to be showing strength i.e., moving higher. Indicators aren’t always a full green light, so I’ll want to see confirmation in price.

The good news is that S&P 500 is at its lower trendline suggesting it as room to run higher.

BOTTOM LINE
I’m Bullish. Seems like it’s been a while since I wrote those words without qualification.

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 Neutral. (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, conservative position for a retiree. (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, October 20, 2025

Trump Fires Prosecutor ... 1929 Again? ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

IS THIS 1929 CRASH AROUND THE CORNER? (MarketWatch)
“...is this rally really reminiscent of 1928? In one way, for sure: The laws of physics create a nervous energy; the higher you rise, the further you fall.
It seems imprudent, even impolite, not to advise caution, rather than mindlessly becoming part of the herd. With that in mind, it seemed apt to check in with Timothy Crack, an economist living in New Zealand, a country with more sheep than people. He describes the market as “another bullet point in the centuries-long list of paroxysmal bubbles in asset prices. We all know that humans have an awful history of chasing stock prices so optimistically that they push them past sensible levels, given fundamentals like earnings and dividends. By historical standards, the S&P 500 has been out of line with historical fundamental ratios for a long time,” Crack told MarketWatch.

“We have slowly gotten to the point where housing prices, gold prices, bitcoin prices, S&P 500 levels and even grocery prices seem to have been inflated to levels that are continually grabbing the headlines,” Crack said. “My secretary and one colleague both asked me yesterday if they should buy physical gold; it will be my hairdresser next. Retail investors have wide access to online trading, commissions have fallen, ETFs keep popping up that allow you to take positions in assets that were previously difficult to access. A friend calls it the ‘everything bubble.’ ” Story at...
‘A friend calls it the everything bubble’: Why do so many economists fear a 1929-style crash?
The date of the crash was 28 October 1929. Markets fell about 50% in 2-weeks.

LEADING ECONOMIC INDICATORS (Conference Board)
Not released today. Maybe Tuesday.

MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 1.1% to 6735.
-VIX fell about 12% to 18.23.
-The yield on the 10-year Treasury declined to 3.982% (compared to about this time prior market day).

MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 11 gave Bear-signs and 10 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 from -9 to -1 (1 more Bear indicator than Bull indicator), a Neutral indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained down - a Bearsh sign - but as shown on the chart above, the 10-day average is not falling as fast. Perhaps we’ll see a reversal.

-The latest Outside Reversal Day signal has been canceled – today’s close was higher than the intra-day high on the day of the signal.

-The Hindenburg Omen signal is cancelled since the McClellan Oscillator turned positive.

-49.5% of issues trading on the NYSE have been up over the last 2-weeks, close, but still a bearish sign.

Following the indicators and price action, I’m Neutral. I’ve been fully invested (50% in stocks) during this weakness. As a retiree, I hold about 20% in cash that I invest tactically when I think risk is low – haven’t seen that in a while. That could change; we’ll see

As for a 1929 style crash, I've seen a few - Dot.com crash; 1987 Debacle; Financial/Housing Crash. There is another one coming, but we never really know when it will begin. I am reasonably certain my indicators will get me out before markets fall too far. I don't see a Crash now. Based on PE's, it is not too much of a stretch to think a crash could be only a year or so away.

BOTTOM LINE
Neutral.

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

Friday, October 17, 2025

Housing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

The real crime in the photo is that Trump is making this pronouncement in front of President Ronald Reagan’s portrait.

“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.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

“Our call of the day suggests something under the surface of the market may have shifted after last week’s selloff, with a pullback just getting started. Independent research consultancy Longview Economics’ global economist and chief market strategist Chris Watling told clients on Monday that he’s cautious where stocks are concerned.” Story at...
Friday’s selloff broke something in the stock market. Here’s what that means for investors.

THREE YEARS OF DOUBLE-DIGIT GAINS MIGHT BE BAD NEWS (Motley Fool)
“If current momentum holds through the end of the year, 2025 would mark a third consecutive year of double-digit gains. Such a streak is exceedingly rare. Over the past century, the index has posted back-to-back annual gains of 20% or more in only four distinct eras: the 1920s, 1930s, 1950s, and 1990s. Each of those periods created enormous wealth -- but also painful lessons -- reminding investors that history's verdict on sustained rallies is anything but clear.” Story at...
The Stock Market Has Only Seen 4 Periods Like This in 100 Years -- and History Couldn't Be Less Clear About What Happens Next

HOUSING STARTS (Forbes)
“The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index rose five points in October to 37, its highest level since April and the biggest month-over-month improvement since January 2024. The index, based on a monthly survey of single-family builders, measures confidence in current and expected sales conditions on a scale of 0 to 100. Readings above 50 indicate that more builders see conditions as good than poor, meaning that pessimism, while abating, is still widespread.” Story at...
https://www.forbes.com/sites/brandonkochkodin/2025/10/16/with-government-stats-paused-homebuilder-survey-sends-a-positive-economic-signal/
My cmt: Government data not available.

MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.6% to 6666.
-VIX fell about 15% to 21.55.
-The yield on the 10-year Treasury rose to 4.011% (compared to about this time prior market day).

MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 16 gave Bear-signs and 7 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 from -13 to -9 (9 more Bear indicators than Bull indicators), a Bearish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained down – a Bearsh sign.

Only 48% of issues trading on the NYSE have been up over the last 2-weeks, a bearish sign.

The S&P 500 is about 1.6% above its 50-dMA. Six days ago, the S&P came close to its 50-dMA and bounced higher. My guess is that this weakness is still not over and I suspect the Index will fall below the 50-day this time. I think the dip-buyers are running out of steam.

Repeating:
We’ve seen 6 Bearish Outside Reversal Days in the last 6 weeks. The last time that happened was in the 7-weeks prior to the 8.5% correction that bottomed in August of 2024. This signal remains in place until the S&P 500 closes above the high for the day on the Outside Reversal Day.

The Hindenburg Omen signal remains in place until the McClellan Oscillator turns positive.

Now I must be bearish. Indicators remain down as is the 10-dMA of indicator spread. Volumes on the NYSE have been rising suggesting that more investors are becoming concerned.

BOTTOM LINE
SIMILAR TO YESTERDAY: I am Bearish, but I doubt that this will turn into a major correction. Breadth was good at the top. My guess is for about a 7% - 10%decline. I may not be able to call a bottom - small declines give small signals – but we’ll try.

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

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 current invested position is about 50% stocks, including stock mutual funds and ETFs.

50% invested in stocks is a normal, conservative position for a retiree. (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, October 16, 2025

Philly Fed... Retail Sales ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

"Never underestimate the power of stupid people in large groups." – George Carlin
My cmt: The Democrats have shut-down government to force the Republicans to vote for Health insurance increases. As a practical matter, given the deficit, why push for restarting Health Care payments to insurance companies for a program that was started as COVID relief and has now expired?

“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.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

“Our call of the day suggests something under the surface of the market may have shifted after last week’s selloff, with a pullback just getting started. Independent research consultancy Longview Economics’ global economist and chief market strategist Chris Watling told clients on Monday that he’s cautious where stocks are concerned.” Story at...
Friday’s selloff broke something in the stock market. Here’s what that means for investors.

“Don’t fight the Fed.” - Stephanie Link, Chief Investment Strategist and Head of Investment Solutions at Hightower Advisors and CNBC commentator.

PHILLY FED BUSINESS INDEX (RTT News)
“The Federal Reserve Bank of Philadelphia released a report on Thursday showing a substantial pullback by its reading on regional manufacturing activity in the month of October. The Philly Fed said its diffusion index for current general activity plummeted to a negative 12.8 in October...” Story at...
https://www.rttnews.com/amp/3582869/philly-fed-index-plunges-to-six-month-low-in-october.aspx

RETAIL SALES
Credit-Card Data Show Softer US Retail Sales as Shutdown Delays Report
My cmt: The article pointed out that since official data is not available, investors are scrambling to find other sources.

MARKET REPORT / ANALYSIS
-Thursday the S&P 500 declined about 0.6% to 6629.
-VIX rose about 23% to 25.31.
-The yield on the 10-year Treasury declined to 3.975% (compared to about this time prior market day).

MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 17 gave Bear-signs and 4 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 declined from -4 to -13 (13 more Bear indicators than Bull indicators), an obviously Bearish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained down – a Bearish sign.

The S&P 500 is about 1% above its 50-dMA. Five days ago, the S&P came close to its 50-dMA and bounce higher. My guess is that it will fall below the 50-day this time. I think the dip-buyers are running out of steam.

Repeating:
We’ve seen 6 Bearish Outside Reversal Days in the last 6 weeks. The last time that happened was in the 7-weeks prior to the 8.5% correction that bottomed in August of 2024. This signal remains in place until the S&P 500 closes above the high for the day on the Outside Reversal day.

The Hindenburg Omen signal remains in place until the McClellan Oscillator turns positive.

Now I must be bearish. Indicators are falling as is the 10-dMA of indicator spread. Volumes on the NYSE have been rising suggesting that more investors are becoming concerned.

BOTTOM LINE
I am Bearish, but I doubt that this will turn into a major correction. Breadth was good at the top. My guess is for about a 7% - 10%decline. I may not be able to call a bottom - small declines give small signals – but we’ll try.

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

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.)

Wednesday, October 15, 2025

Fed Beige Book ... NY Fed Manufacturing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

Politics! Why I hate politicians.

HAMAS CRACKSDOWN (WSJ)
“Firefights and public executions raise concerns about spiral of internecine violence; ‘I could hear gunfire all around.’ A U.S.-brokered cease-fire has hit pause on the war between Hamas and Israel. In its place, a fight between Hamas and other armed Palestinian groups in the Gaza Strip is now under way.
As Israeli troops pulled back last week to facilitate a deal that freed the living hostages still held in Gaza, Hamas surged security forces in behind them—a public assertion of authority intended to make clear the group remains the enclave’s governing power.” Story at...
https://www.wsj.com/world/middle-east/hamas-gaza-israel-withdrawal-33d69b55?mod=itp_wsj
My cmt: Protestors chanted the Hamas slogan, “"From the river to the sea, Palestine will be free." One wonders if this is the “freedom” they had in mind.

AMERICANS FALLING BEHIND ON CAR PAYMENTS (WSJ)
“To afford an automobile, more consumers, especially lower-income families, have resorted to buying used cars and taking out longer loans.
Now, more are falling behind on their loans, signaling that lower-income consumers are struggling to afford payments as wages stagnate and unemployment ticks higher. While the economy has remained strong, and Wall Street has kept buying subprime auto loans, the auto market is evidence that not all is well under the hood.” Story at
https://www.wsj.com/business/autos/auto-loans-subprime-late-payments-1d8bb33c?gaa_at=eafs&gaa_n=ASWzDAjL4rAwIUrPOcFg9gXElINpXa7uyu4Dj3qDT6-LmN73a6hvs5rE4tVCtLgpezo%3D&gaa_ts=68efc9f2&gaa_sig=aByo3Ue-RqQo_3QogwLN0kEdyZKwb_ceUjtJdQsgciSJQzL9kXKYvrNc2OJ1LLCRtKAnKtG9BRpUfBhVa-ahew%3D%3D

S&P 500 PE RATIO JUST HIT 30 (Fortune)
“...the only PE that matters is the one that that includes all the expenses, and counts only the official profits already in the books. It’s today’s S&P 500 index price divided by the companies’ GAAP net earnings posted over the most recent four quarters. S&P reports that with over 99% of all Q2 2025 EPS now collected, EPS over the trailing year equals $222.55. Hence, the S&P that started September at 6664 and a multiple of 29.94 by just after 3 pm had reached 6696 to hit 30.09... A PE of 30 means big caps stocks are really, really expensive by historical standards. It also signals that from these heights, the chance for big returns going forward over any extended period are low, and the risks of a sharp “reversion to the mean” downdraft is far more likely. In the last quarter century-plus, the S&P PE has only been higher on one occasion that counts. It exceeded 30 for 10 quarters from late 1998 to the close of 2002 during the Dot Com craze. It then took stocks seven years to regain the highs reached in the frenzy.” Story at...
https://fortune.com/2025/09/23/stock-market-crash-predictions-overvalued/
My cmt: The S&P 500 gained almost 20% in 1999. The trick is not to get out too early and not to leave too late. The S&P 500 lost 47% from 2000 thru 2002.

“You have a lot of assets out there which look like they’re entering bubble territory,” he said. “That doesn’t mean you don’t have 20% to go — it’s just one more cause of concern.” – Jamie Dimon, CEO JP Morgan Chase

FED BEIGE BOOK (Federal Reserve)
“Economic activity changed little on balance since the previous report, with three Districts reporting slight to modest growth in activity, five reporting no change, and four noting a slight softening. Overall consumer spending, particularly on retail goods, inched down in recent weeks, although auto sales were boosted in some Districts by strong demand for electric vehicles ahead of the expiration of a federal tax credit at the end of September. Demand for leisure and hospitality services by international travelers fell further over the reporting period, while demand by domestic consumers was largely unchanged. Nevertheless, spending by higher-income individuals on luxury travel and accommodation was reportedly strong. Several reports highlighted that lower- and middle-income households continued to seek discounts and promotions in the face of rising prices and elevated economic uncertainty. Manufacturing activity varied by District, and most reports noted challenging conditions due to higher tariffs and waning overall demand. Activity in agriculture, energy, and transportation was generally down among reporting Districts. Conditions in the financial services sector and other interest rate-sensitive sectors, such as residential and commercial real estate, were mixed; some reports noted improved business lending in recent weeks due to lower interest rates, while other reports continued to highlight muted activity. The outlook for future economic growth varied by District and sector. Sentiment reportedly improved in a few Districts, with some contacts expecting an uptick in demand over the next 6 to 12 months. However, many others continued to expect elevated uncertainty to weigh down activity. One District report highlighted the downside risk to growth from a prolonged government shutdown.” Report at...
https://www.federalreserve.gov/monetarypolicy/beigebook202510-summary.htm

NY FED MANUFACTURING (RTT News)
“The New York Fed said its general business conditions index surged to a positive 10.7 in October after plunging to a negative 8.7 in September, with a positive reading indicating growth. Economists had expected the index to climb to a negative 1.8... The index reached its highest level since hitting 36.7 in January, as close to half of firms expect conditions to improve in the months ahead.” Story at
https://www.rttnews.com/3582425/new-york-manufacturing-index-unexpectedly-indicates-growth-in-october.aspx

MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.2% to 6657.
-VIX slipped about 0.1% to 20.78.
-The yield on the 10-year Treasury declined to 4.028% (compared to about this time prior market day).

MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 15 gave Bear-signs and 11 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 from -6 to -4 (4 more Bear indicators than Bull indicators), but remained a Bearish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained down – a Bearsh sign.

“Don’t fight the Fed.” - Stephanie Link, Chief Investment Strategist and Head of Investment Solutions at Hightower Advisors and CNBC commentator.

Bearish Outside Reversal
The Bearish Outside Reversal signal remains in place until the S&P 500 closes above the high on the Reversal Day.
“An outside reversal is a price pattern that indicates a potential change in trend on a price chart. The two-day pattern is observed when a security’s high and low prices for the day exceed the high and low of the previous day’s trading session... Technical analysts and experienced traders prefer to build trading signals using this identification in conjunction with other information such as trend, support and resistance or technical studies.” – Investopedia.

We’ve seen 6 Bearish Outside Reversal Days in the last 6 weeks. The last time that happened was in the 7-weeks prior to the 8.5% correction that bottomed in August of 2024. This signal remains in place until the S&P 500 closes above the high for the day on the Outside Reversal day.

The Hindenburg Omen signal remains in place until the McClellan Oscillator turns positive.

Indicators improved to NEUTRAL, so I’m in no rush to buy the dip. Even though I am “fully invested” at 50% in stocks, I have cash available that I deploy when I am more confident.

BOTTOM LINE
I am Neutral.

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.)

Tuesday, October 14, 2025

Business Optimism ... 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.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

“Blind obedience to authority is the greatest enemy of truth.” - Albert Einstein

GAZA IN THE FINAL DAYS OF THE WAR (WSJ-Letters))
“... President Trump did what not only President Biden couldn’t but what all the European leaders recently calling for “cease-fire” never tried. The 20-point plan achieves Israel’s goals of the war, protects Palestinian interests, offers hope for a future without Hamas and sets the conditions for lasting peace.
As I boarded my plane out of Tel Aviv on Oct. 10, pure joy was in the air. It permeated every space, billboard sign and hotel. Israelis weren’t celebrating vengeance. They were relishing the prospect of peace, security and the end of a nightmare.
I had spent several days in and around Gaza City, where I was talking to division, brigade and battalion commanders and their soldiers actively destroying Hamas. I had no idea that I may have been with them during the last day of major fighting in the war. They discussed how they succeeded in moving civilians out of harm’s way, removing Hamas’s main weapon. They described adapting to the thousands of IEDs Hamas had placed seemingly everywhere, and how their units had responded to the terror group’s new urban and guerrilla tactics. Most palpable was that they were optimistic the military pressure was working—not because they were intent on “genocide,” but because the thought of going home, with all the hostages returned, made them happy.
Now the “cease-fire now” crowds are silent. The commentators who rebuked Israel’s strategy, urged the nation to abandon its hostages and compromise its borders and declared it impossible to defeat Hamas were wrong. It took an act of force, strength and clarity of will, denying Hamas any hope of achieving its goals.
Of the thousands of reasons Israel wasn’t committing genocide or ethnic cleansing, this moment is proof enough. Israel is joyous over a deal that ends the war with no ethnic cleansing. Joy isn’t what you feel when your deepest ambitions have been thwarted. It is what you feel when your nation has survived, your hostages are home and your children can dream again. It turns out Israel’s goal was never destruction—it was peace.” - John Spencer, Urban Warfare Institute. From...
https://www.wsj.com/opinion/what-i-saw-in-gaza-in-the-final-days-of-war-israel-war-hostages-006fe985?mod=letterstoeditor_article_pos1

NFIB SMALL BUSINESS OPTIMISM (NFIB)
“Optimism among small business owners decreased in September. While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges. Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations.... The net percent of owners raising average selling prices rose 3 points from August to a net 24% (seasonally adjusted). A net 31% (seasonally adjusted) plan to increase prices over the next three months, up 5 points from August.” Report at...
https://www.nfib.com/news/monthly_report/sbet/

MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 declined about 0.2% to 6640.
-VIX rose about 9% to 20.81.
-The yield on the 10-year Treasury declined to 4.032% (compared to about this time prior market day).

MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 15 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 from -10 to -6 (6 more Bear indicators than Bull indicators), but remained a Bearish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained down – a Bearsh sign.

Today was a confusing day for internals. Advancers outpaced decliners 2 to 1; up-volume was twice down-volume; and New-highs outpaced new-lows. Looks like good news, but the S&P 500 declined and VIX was almost 8% higher – that’s not a good sign especially since the S&P 500 Index faded in the last hour of trading demonstrating a lack of follow-thru.

Bearish Outside Reversal
We saw another Bearish Outside Reversal Day Tuesday.
“An outside reversal is a price pattern that indicates a potential change in trend on a price chart. The two-day pattern is observed when a security’s high and low prices for the day exceed the high and low of the previous day’s trading session... Technical analysts and experienced traders prefer to build trading signals using this identification in conjunction with other information such as trend, support and resistance or technical studies.” – Investopedia.

That is the 6th Bearish Outside Reversal Day in the last 6 weeks. The last time that happened was in the 7-weeks prior to the 8.5% correction that bottomed in August of 2024.

There was also another Hindenburg Omen today.
“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. I wouldn’t call 2 in 3 days a cluster.

Indicators are still leaning bearish, so I’m in no rush to buy the dip. Even though I am “fully invested” at 50% in stocks, I have cash available that I deploy when I am more confident.

BOTTOM LINE
I am Neutral / borderline Bearish.

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

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.)