“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.
“There’s a lot of exuberance out there,” Dimon continued.
“But it was in 1972, 1986, 2000, 2007. That doesn’t give me comfort.” – Jamie
Dimon
THE SOCIALISM WE ALREADY HAVE (WSJ-Excerpt)
“Sorry, youngsters, ask Scott Bessent: We’ve already run
out of other people’s money…
…An American baby born today owes $376,000 in federal debt and unfunded entitlement liabilities, assuming the burden is
evenly distributed. Of course, it isn’t. We oldsters plan on checking out
before the bill comes due… …Bernie Sanders has an answer: Make billionaires
pay. Unfortunately, the wealth of billionaires consists of property rights, the
value of which disappears if confiscated. The Scandinavian societies young
socialists idealize actually protect private wealth. Their middle-class
taxpayers pay taxes willingly because the benefits they get in return they
believe to be efficiently and fairly delivered. These are small, homogenous
countries with “high social trust,” which, their experts are first to
remind you, the U.S. isn’t.” - Holman W. Jenkins Jr., WSJ editorial board of
The Wall Street Journal, writes the twice-weekly “Business World” column.
Opinion at…
NATIONAL DEBT CRISIS (WSJ-Excerpt)
“For decades, deficit hawks have argued that we can’t go
on this way indefinitely. It turns out that “indefinitely” has lasted longer
than we expected—another confirmation of Adam Smith’s quip that “there is
a great deal of ruin in a nation.” But the recent tremors in global markets
suggest that we are dangerously close to the end of the extended grace period
we have enjoyed…
…In 2001, after four straight years of budget surpluses,
the CBO released a 10-year forecast projecting that the national debt would be
eliminated by 2009. This didn’t happen. Combined with slower-than-expected
economic growth, the Bush tax cuts reduced income tax receipts from a projected
$1.8 trillion in 2011 to $1.2 trillion. During the same period, outlays to pay
for long wars in the Middle East and programs to soften the blow of the Great
Recession increased discretionary spending in 2011 from a projected $900
billion to $1.3 trillion…
…It will be difficult to stanch the flow of red ink, but
the alternative—an ever-growing debt that saps our economic vitality—would be
far worse.” - William A. Galston, the weekly Politics & Ideas column in The
Wall Street Journal. Opinion at…
My cmt: We’ll pay $1-Trillion this fiscal year just to
pay the interest on the National Debt, 19% of the total federal budget. Holy
cr@p!
Have you heard one politician address this issue with
proposed solutions?
DISASTER ON WALL STREET (Motley Fool)
“The stock market has reached a level observed only three
times since January 1871…
…The beauty of the Shiller P/E Ratio is that it's based
on average inflation-adjusted earnings over the previous 10 years, rather than
trailing 12-month earnings, as with the traditional P/E ratio. Encompassing a decade's worth of
earnings history ensures that recessions can't skew the Shiller P/E or
adversely affect its usefulness.
…The S&P 500's Shiller P/E Ratio has averaged 17.4
when backtested to January 1871. As of the closing bell on Aug. 24, the Shiller
P/E clocked in at 41.84, approximately 140% above its nearly 156-year average…After
the Shiller P/E hit its all-time high, the dot-com bubble erased 49% and 78% of
the S&P 500's and Nasdaq Composite's values, respectively…To be clear, a
historically high CAPE Ratio doesn't guarantee that stocks will plunge, nor can
it pinpoint when the music will stop on Wall Street. But based solely on what
history has shown us, premium stock valuations aren't sustainable over long
periods.” Story at…
CHICAGO PMI (IndexBox)
“The Chicago Purchasing Managers Index has posted a fresh
reading that signals a downturn in regional manufacturing activity. The index
now stands at 47.1, a level that falls beneath the 50-point mark separating
expansion from contraction. This outcome diverges markedly from what economists
had projected.” Story at…
DALLAS FED MANUFACTURING (Dallas Federal Reserve) “
Texas manufacturing output growth accelerated in August,
according to business executives responding to the Texas Manufacturing Outlook
Survey. The production index, a key measure of state manufacturing conditions,
increased six points to 16.1…Perceptions of broader business conditions
improved in August…Price pressures were relatively stable but remained markedly
elevated while wage pressures eased in August… Expectations
are for increased manufacturing activity six months from now.” Report at…
QUICK MARKET SUMMARY
-Monday the S&P 500 declined about 0.3% to 7686.
-VIX rose about 3% to 14.91.
-The yield on the 10-year Treasury rose to 4.78%
(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, 14 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
The daily, bull-bear spread of 50-indicators was
unchanged at -6 (6 more Bear indicators than Bull indicators), a slightly
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 down, a BEARISH sign.
Unchanged volume was very high today (Monday) suggesting
confusion among investors. Some think this represents a reversal. Since the
S&P 500 chart is close to flat recently it is hard to say which way a
reversal would go. Since this signal is often wrong, it is not one of my
indicators. However, RSI is down, suggesting a reversal is more likely to be higher
if a reversal were to occur.
The Bollinger Band Squeeze remains.
“A Bollinger Band Squeeze
is a technical analysis pattern that happens when the upper and lower [Bollinger]
bands come close together, signaling a period of low market volatility that
often precedes an explosive price breakout…To determine breakout direction,
Bollinger suggests that it is necessary to look to other indicators…
If there is a
positive divergence—that
is, if indicators are heading upward while price is heading down or neutral—it
is a bullish sign.
For further confirmation, look for volume to build on up days. On the other
hand, if price is moving higher but the indicators are showing negative
divergence, look for a downside breakout—especially if there have been
increasing volume spikes on down days. Another indication of breakout direction
is the way the bands move on expansion. When a powerful trend is born, the
resulting explosive volatility increase is often so great that the lower band
will turn downward in an upside break, or the upper band will turn higher in a
downside breakout.” - Investopedia.
My indicators do not mirror the ones that Bollinger
recommended. The only one we have in common was RSI. RSI is not giving a strong
signal either way, but it is closer to a buy than a sell. Overall, my
indicators have been in a holding pattern so it is mostly guesswork which way a
squeeze breakout will go. I’m guessing higher.
BOTTOM LINE
I’m neutral until conditions change.
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…
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…
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.)
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.
