Navigate the Stock Market: February 2025

Friday, February 21, 2025

Existing Home Sales ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

TODAY’S COMMENT
Options trading ended today so volumes were very high, about 20% above the monthly average. That contributed to a wild day and the indicators reacted, too.

The daily, bull-bear spread of 50-indicators fell to a Bearish -10 (10 more Bear indicators than Bull indicators). The 10-dMA of the spread continued falling, a bearish sign.

Breadth continued down. The % of issues advancing on the NYSE is falling on all time frames that I measure. The % of issues advancing is below 50% for 10-day, 50-day, and 100-day periods. Indicators are suggesting it’s time to sell some stocks, but perhaps not yet. The S&P 500 broke below its 50-dMA, but recovered to finish 0.1% above the 50-dMA at the close. The 50-day is a strong level of support and is normally around the lower trend line, so it is not time to panic. This may be just normal weakness. If price and indicators continue down, all bets are off.

I’ll trim my stock holdings if indicators continue down and the S&P 500 breaks below its 50-dMA. That might not be on Monday.

Friday was a statistically significant down-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, down-day is followed by an up-day about 60% of the time.

BOTTOM LINE
I am neutral - 60% in stocks – let’s see what next week brings.

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

FRIDAY 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 current invested position is about 60% 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.

Thursday, February 20, 2025

Jobless Claims ... LEI ... Philly Fed ... 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.

JD VANCE
“And when the courts ... stop you, stand before the country like Andrew Jackson did and say: ‘The chief justice has made his ruling. Now let him enforce it...’" – JD Vance, VP.

JOSH HAWLEY
"I think you can dislike the court's opinion and think they're wrong on the substance, and criticize them for that, and you certainly can vigorously appeal...And you can also read a mandate—you know, when a court issues an opinion, they issue what's called a mandate that sort of sets the direction ... It's perfectly fine to read that very narrowly, to be like, 'All right, fine, you said to do this and we're going to do that, but we're going to do only that, we're not going to apply it broadly..."I think outright, sort of just, like, 'Oh, we're just going to completely ignore the decision?' That, I think you can't do. Andrew Jackson did that, infamously. He was wrong on that. That was the Trail of Tears. That was lawless. That was wrong." – Republican Senator Josh Hawley, Missouri.
My cmt: If enough Republicans agree, maybe the next impeachment will stick.

IS MUSK RIGHT ABOUT SOCIAL SECURITY FRAUD? – NO (News Nation)
“Elon Musk said he might have uncovered “the biggest fraud in history” when he found millions of people over age 100 listed in a Social Security database, but that’s not what’s going on... Records with incomplete death info are a well-known, long-standing challenge for the Social Security Administration, but a 2023 agency inspector general report found “almost none” of the 18.9 million people listed as 100 or older were receiving benefits.” Story at...
https://www.newsnationnow.com/politics/elon-musk-social-security-fraud/
My cmt: DOGE credibility is suspect when items are flagged as fraud when they are not.

MORE DOGE – THESE FOLKS ARE CLUELESS
“The Department of Government Efficiency (DOGE), headed by Elon Musk, claims to have uncovered that the U.S. government processed nearly $40 billion in transactions using approximately 4.6 million active credit card accounts in the last fiscal year. The initiative, aimed at reducing government spending, announced its findings on social media platform X on Tuesday.”
DOGE Reveals Over 4 Million Government Credit Cards Linked to 90 Million Transactions
My cmt: So what? That’s about $1,000 per card in a year. My Federal agency used them for motor pool parts, heavy equipment parts, fuel, etc. Every Government employee used them when on travel, all for official purposes. It saved money by eliminating paperwork. Supervisors of employees with credit cards routinely checked to insure they were used only for official purposes. During my 35-year career I was appointed investigating officer on only one credit card case. The individual had purchased candy for the office (not an official use of the card) and a coffee maker and toaster for personal use, all violations of policy. The supervisor had flagged the illegal use, but not in the month that it took place so I was tasked to investigate. The employee was suspended without pay for a while, but was fired within a year for another transgression.

PHILLY FED (RTT News)
“Philadelphia-area manufacturing activity continued to expand in the month of February, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday, although the index of activity in the sector pulled back sharply.” Story at...
https://www.rttnews.com/3514757/philly-fed-index-pulls-back-sharply-but-still-indicates-growth-in-february.aspx

JOBLESS CLAIMS (USA Today)
“The Trump administration’s sweeping layoffs of federal employees already appear to be pushing up joblessness in Washington, D.C., and an economist projects they'll tip the city into a recession this year... Last week, a seasonally adjusted 219,000 Americans across the U.S. filed initial claims, up from 214,000 the week before and underscoring that, overall, layoffs remain low.” Story at...
https://www.usatoday.com/story/money/2025/02/20/trump-federal-layoffs-impact-on-washington-dc/79135624007/

LEADING ECONOMIC INDEX (Conference Board)
“The US LEI declined in January, reversing most of the gains from the previous two months,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “Consumers’ assessments of future business conditions turned more pessimistic in January, which—alongside fewer weekly hours worked in manufacturing—drove the monthly decline... the LEI’s six-month and annual growth rates continued to trend upward, signaling milder obstacles to US economic activity ahead. We currently forecast that real GDP for the US will expand by 2.3% in 2025...” Report at...
https://www.conference-board.org/topics/us-leading-indicators

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Thursday the S&P 500 declined about 0.4% to 6118.
-VIX declined about 3% to 15.66.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.507%.

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20/2024.
QLD – added 12/20/2024. (IRA acct.)
NVDA – added 1/6/2025.

The decline in Nvidia appears to be overblown. Regarding competition to Nvidia, Dan Ives (Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities) says, “The threat is minimal.” He recommended buying Nvidia. I will hold NVDA and see what develops...

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 10 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 reversed back to a Neutral +1 (1 more Bull indicator than Bear indicators). The 10-dMA of the spread reversed down, a bearish sign.

Breadth continued down. The % of issues advancing on the NYSE is falling. The 50-dMA of this indicator and the 10-day are falling. The 100-day is also falling, but it remains above 50% so the 100-day signal is ok so far.

Repeating: Still, if breadth continues to weaken, I’ll need to get more conservative from an investing perspective. Until then, I’ll watch indicators.

BOTTOM LINE
I am cautiously bullish – 60% in stocks.

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

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

Wednesday, February 19, 2025

Housing Starts / Permits... 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.

“And when the courts ... stop you, stand before the country like Andrew Jackson did and say: ‘The chief justice has made his ruling. Now let him enforce it...’" – JD Vance, VP.

"I think you can dislike the court's opinion and think they're wrong on the substance, and criticize them for that, and you certainly can vigorously appeal...And you can also read a mandate—you know, when a court issues an opinion, they issue what's called a mandate that sort of sets the direction ... It's perfectly fine to read that very narrowly, to be like, 'All right, fine, you said to do this and we're going to do that, but we're going to do only that, we're not going to apply it broadly..."I think outright, sort of just, like, 'Oh, we're just going to completely ignore the decision?' That, I think you can't do. Andrew Jackson did that, infamously. He was wrong on that. That was the Trail of Tears. That was lawless. That was wrong." – Republican Senator Josh Hawley, Missouri.
My cmt: If enough Republicans agree, maybe the next impeachment will stick.

TRUMP SELLS OUT UKRAINE (Newsweek)
“Speaking on his peace talks with Russian President Vladimir Putin, Trump told reporters that Ukraine did not need a seat at the negotiating table because it "should've ended [the war] in three years. You should have never started it. You could have made a deal." Story at...
https://www.newsweek.com/trump-says-ukraine-should-have-never-started-war-russia-2033014
My cmt: Proving once again that Trump is an unhinged idiot. A deal? Sure, become a province of Russia and accept the murder of Zelinsky and all of Ukraine’s politicians in the aspiring democracy. Trump has no sense of history.
P.S. I am a retired civil service employee. I mention that because if I was working, I wouldn’t want to be DOGE’d.

TURNING OLD HOSPITALS INTO HOUSING (WSJ)
“Across the country, closed hospitals and their land are becoming a prime target for towns looking to boost limited housing stock. Hospitals offer features that make them readily adaptable to homes, such as tall ceilings, broad hallways and abundant natural light... The U.S. government is incentivizing the process, too. Federal historic tax credits to these conversions are skyrocketing while demand for housing stays high.” Story at...
https://www.wsj.com/real-estate/former-hospitals-residential-housing-bae7c276
My cmt: Our Government is giving away hundreds of millions of dollars to “incentivize” a process that would be ongoing with no incentive. More Congressional waste.

INVESTORS HAVEN’T BEEN THIS PESSIMISTIC SINCE 2023 (WSJ)
“Bearishness among individual investors—measured by the percentage who expect stock prices to fall over the next six months—reached 47.3% for the week ended Feb. 12, according to the latest survey from the American Association of Individual Investors. That is the highest level since November 2023.” Story at...
https://www.wsj.com/finance/stocks/investor-sentiment-outlook-aaii-survey-725a24bb?mod=md_usstk_news

HOUSING STARTS / PERMITS
U.S. single-family homebuilding fell sharply in January amid disruptions from snowstorms and freezing temperatures, with a rebound likely to be limited by higher costs from tariffs on imports and elevated mortgage rates... Single-family housing starts, which account for the bulk of homebuilding, dropped 8.4% to a seasonally adjusted annual rate of 993,000 units last month... Permits for future construction of single-family housing were unchanged...” Story at...
https://finance.yahoo.com/news/us-single-family-housing-starts-133805236.html

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Wednesday the S&P 500 rose about 0.2% to 6144.
-VIX declined about 0.5% to 15.27.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.535%.

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20/2024.
QLD – added 12/20/2024. (IRA acct.)
NVDA – added 1/6/2025.

The decline in Nvidia appears to be overblown. Regarding competition to Nvidia, Dan Ives (Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities) says, “The threat is minimal.” He recommended buying Nvidia. I will hold NVDA and see what develops...

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 8 gave Bear-signs and 17 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 above WSJ article says that investors are pessimistic. Maybe, but that’s not how they are betting. I measure Sentiment as a 5-day moving average of %-Bulls (Bulls/{bulls+bears}) based on the amounts invested in selected Rydex/Guggenheim long and short mutual funds. My sentiment reading is based on what individual investors are betting – it is a very bullish 96%-bulls. This is close to being too bullish, which is a bearish indication.

The Bollinger Squeeze I mentioned yesterday resolved today, but I still would not be surprised to see a breakout. Based on today’s action, it looks more like a breakout is likely to be down.

At the 4pm close, the CNBC anchors were discussing with a guest how the market has broadened out. Don’t count on it. There was a new, all-time high on the S&P 500 Wednesday. When markets are at new, all-time highs, we expect to see a lot of individual stocks making new, 52-week highs. That didn’t happen today. The number of new-52-week highs was too low and is now giving a warning: a correction is coming and it is likely to be greater than 10%.

Another measure of Breadth is slipping too. The % of issues advancing on the NYSE are falling. The 50-dMA of this indicator is already bearish and the 10-day and 100-day (shown in the chart below) are also falling.

Even with some indicators looking bad, I don’t want to get too bearish. The daily, bull-bear spread of 50-indicators improved to a Bullish +9 (9 more Bull indicators than Bear indicators). The 10-dMA of the spread is still headed higher, another bullish sign.

Still if breadth continues to weaken, I’ll need to get more conservative from an investing perspective. Until then, I’ll watch indicators.

BOTTOM LINE
I am cautiously bullish – 60% in stocks.

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

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.)

Tuesday, February 18, 2025

NY Fed Manufacturing ... 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.

ALARMING REPORT SHOWS THE U.S. DROWNING IN RED INK (New York Post)
“The federal government is racing toward a fiscal cliff, with a new report citing a mind-numbing $838 billion cash shortfall just for the first four months of the fiscal year.
Yet Democrats are losing their minds over Team Trump’s efforts to trim fat and waste. Do they want the Uncle Sam to go belly up?” Story at...
Alarming report shows US drowning in red ink — as Democrats block spending cuts
My cmt: Musk and Trump are firing a lot of Government employees, including all probationary employees (less than 1 year of service), but the entire Government workforce is less than 1.5% of the total US non-farm employment according to the Center for Economic and Policy Research. It was 4.5% back in the 40’s so government employment may not be as bloated as believed. But cutting employees won’t make much difference in the deficit. The problem are the programs that Congress and prior Administrations (Democrat and Republican) have created over the years. That waste will be hard to eliminate. For example...

There is still a requirement to make gasoline with 10% ethanol that dates to the gas crisis of the 1970’s when Saudi Arabia formed the Oil Cartel. The theory was that adding 10% ethanol derived from corn would cut gasoline needs by 10%. Now, the US produces more energy than it uses so there is no need for ethanol in gasoline. Worse, the ethanol destroys small engine carburetors and hoses since it attracts water. Cost wise, I suspect it does not save money since there are ethanol subsidies and energy is required to make the ethanol. It also diverts feed corn to fuel production that drives up the cost of beef. In Trump’s first presidency there was a push to do away with the ethanol requirement for gasoline, but there were too many congressional districts that would be hurt, so the waste continues. Farm dependent counties are overwhelmingly Republican so don’t expect that they will all line up behind DOGE when their constituents are hurt.

The Renewable Fuels Association states, they “...will continue our diligent efforts with Congress and the administration to ensure renewable fuels have a prominent role in our nation’s energy strategy. From removing arcane barriers that prevent year-round consumer access to higher ethanol blends (like E15) to protecting the Renewable Fuel Standard to ensuring smooth and rational implementation of clean energy tax provisions from last year’s Inflation Reduction Act, we will continue to work with our nation’s leaders to capture ethanol’s full potential as a homegrown, low-carbon, low-cost energy source.” In other words, they have a good lobby and will continue to payoff congress; we all know that our representatives only care about getting themselves reelected. And this is only one small example of waste, fraud and abuse.

Here are a few examples of DOGE budget savings.
DOGE PROGRESS (DOGE.com)
“-Today, the Department of Education terminated 29 DEI training grants totaling $101mm. One sought to train teachers to “help students understand / interrogate the complex histories involved in oppression, and help students recognize areas of privilege and power on an individual and collective basis.“ - 07:13 PM · Feb 10, 2025
Today,the Department of Agriculture terminated 18 contracts for a total of ~$9mm, including contracts for “Central American gender assessment consultant services,” "Brazil forest and gender consultant services”, and the “women in forest carbon initiative mentorship program.” 05:58 PM · Feb 10, 2025.
-Great coordination across 35 agencies over the last two days to terminate 199 wasteful contracts saving ~$250mm, including: -Contract for “Asia Pacific - Sri Lanka climate change mitigation adaption and resilience coordinator services for forest service”
-Workshop for “Intercultural communication diversity dialogue circle communicating across differences” - 9:04 PM · Feb 7, 2025
From...
https://doge.gov/
My cmt: I’ve commented previously that the President can’t cancel appropriated funds that have been authorized in law. Appropriations Bills are passed by both Houses of Congress and signed into law by the President. The exception to that rule would be in cases where Congress authorized the Executive Branch (including specific Executive Branch Agencies, such as EPA, Energy and Education) to make grants up to a specified amount. Those grants would be discretionary to the agency, so unspent funds can be rescinded (my opinion).

Congress has gotten lazy about how they dole out funds. When the US “saved” Chrysler, Congress passed the Chrysler Corporation Loan Guarantee Act of 1979 that gave them a 1.5-billion-dollar loan. The bill was signed into law by President Jimmy Carter on January 7, 1980. Now Congress will often pass a law that creates slush funds managed by agencies. That’s how Rivian got a 6.7-billion-dollar loan from DOE. From a google search: “The Department of Energy's (DOE) Loan Programs Office (LPO) provides loans and loan guarantees for clean energy, transportation, and Tribal energy projects. The process includes pre-application consultations, application and review, due diligence, and financial closing.”

NY FED MANUFACTURING (NY Fed)
“Business activity edged higher in New York State in February, according to firms responding to the Empire State Manufacturing Survey. The headline general business conditions index climbed eighteen points to 5.7.” Report at...
https://www.newyorkfed.org/survey/empire/empiresurvey_overview

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Tuesday the S&P 500 rose about 0.2% to 6130.
-VIX rose about 4% to 15.35.
-The yield on the 10-year Treasury rose (compared to about this time, prior trading day) to 4.552%.

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20/2024.
QLD – added 12/20/2024. (IRA acct.)
NVDA – added 1/6/2025.

The decline in Nvidia appears to be overblown. Regarding competition to Nvidia, Dan Ives (Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities) says, “The threat is minimal.” He recommended buying Nvidia. I will hold NVDA and see what develops...

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 7 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
There was a new, all-time high on the S&P 500 Tuesday. Based on the number of new-52-week highs if we do have a correction (and I'm not predicting one), it is more likely that it would be less than 10%.

Today, there was a Bollinger Squeeze that occurs when Bollinger Bands are close together. “A Bollinger Band... is defined by a series of lines that are plotted two standard deviations—both positively and negatively—away from the simple moving average (SMA) of the price of an asset... A Squeeze is triggered when volatility reaches a six-month low and is identified when Bollinger Bands reach a six-month minimum distance apart...” The Bollinger Squeeze predicts a big move (breakout) in the S&P 500, but it doesn’t tell us the direction of such a move. To determine breakout direction, Bollinger suggests looking at other indicators. He suggests using the relative strength index (RSI). Bollinger bands are discussed at Investopedia...
https://www.investopedia.com/terms/a/accumulationdistribution.asp
RSI is in the middle of its range so it will not tell us what direction a breakout may be. In addition, Bollinger mentions a few other indicators I don’t use. Looking at some of my indicators, we see the following: Buying-pressure minus selling-pressure is basically flat. Volume is bullish. The Preponderance of indicators is bullish - The daily, bull-bear spread of 50-indicators improved to a Bullish +8 (8 more Bull indicators than Bear indicators). The 10-dMA of the spread reversed upward, another bullish sign.

We might guess that the move will be higher, but the S&P 500 is near the top Bollinger Band and that suggests a drop, so I won’t try to trade the move.

There was also very High unchanged volume today. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. Are markets turning back down? Perhaps, the best we can say is that investors are confused. “High-unchanged-volume” is not one of my indicators because it is often wrong.

BOTTOM LINE
I am cautiously bullish – 60% in stocks.

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)

TUESDAY MARKET INTERNALS (NYSE DATA)

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.)

Friday, February 14, 2025

Retail Sales ... Industrial Production ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

Markets are closed Monday for George Washington’s Birthday/President’s Day. No Blog Monday.

“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.

RETAIL SALES
“Consumers sharply curtailed their spending in January, indicating a potential weakening in economic growth ahead, according to a Commerce Department report Friday. Retail sales slipped 0.9% for the month...” Story at...
https://www.cnbc.com/2025/02/14/retail-sales-slumped-0point9percent-in-january-down-much-more-than-expected-.html

INDUSTRIAL PRODUCTION (Forex Factory)
“Industrial production in the United States increased by 0.5% in January compared to the previous month, the Federal Reserve's Board of Governors stated in its report published on Friday.” Story at...
https://www.forexfactory.com/news/1327957-us-industrial-production-grows-05-in-january

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Friday the S&P 500 little changed at 6115.
-VIX declined about 2% to 14.77.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.478%.

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20/2024.
QLD – added 12/20/2024. (IRA acct.)
NVDA – added 1/6/2025.

The decline in Nvidia appears to be overblown. Regarding competition to Nvidia, Dan Ives (Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities) says, “The threat is minimal.” He recommended buying Nvidia. I will hold NVDA and see what develops...

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 10 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 slightly Bullish to Neutral +3 (3 more Bull indicators than Bear indicators). The 10-dMA of the spread is still falling, a bearish sign.

Why so many indicators? I spent years looking for the perfect indicator – that would be the one indicator that is 100% reliable. It turns out there is no such thing. For years I followed a small group of indicators in 4 categories: Sentiment, Price, Volume and VIX. Later, I came up with a larger group of indicators that were short-term in nature. Surprisingly, they were often more accurate than the original group of 4. Then I started doing a Friday summary of all my indicators. That summary proved to be better at sell and buy signals than my other ensembles. I think it’s a bit like asking people for their opinion on a complex subject - the more you ask, the more likely you’ll get a correct answer. That was the evolution of my system that is based on the 50-indicator ensemble that is now mostly automatically produced in my output and shown in the chart above. As always, it is important (and counter intuitive) to remember that the indicators do not predict the future – they give an indication of trend, and warnings when divergence forms between indicators and the market. The indicators have been good at top warnings. The ensemble called the top of the Coronavirus, 30% decline nearly to the day; the top and bottom of the 25% decline that started in October 2022 (within a few days, top and bottom) and even warned on the smaller corrections in 23 and 24, although I don’t try to do short term trading nor is my system good at small corrections.

Internals were mildly bullish today as were the overall indicators. The 10-day moving average of the bull minus bear spread is still falling so we can’t feel too bullish.

Repeating: If the S&P 500 makes a new high we’ll get some added information about the health of markets. For now, markets appear unsettled.

BOTTOM LINE
I am still Neutral – 60% in stocks.

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.)

Thursday, February 13, 2025

PPI ... Payroll Report ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“Robert F Kennedy Jr. and Tulsi Gabbard have cleared the hurdle towards Senate confirmation. Is this the best America can do?” - Michael Ramirez. Political commentary at...
https://michaelpramirez.com/index.html

“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.

MUSK’s DOGE (NTSM)
“I can’t say that I disagree with the goals of DOGE. There is plenty of waste in Government. During my 35-year career in Government I managed a relatively small program (by Government standards) that might be in the 50-million dollar range (inflation adjusted) these days. At one point, the program managers in my agency met with the head of OMB (Office of Management and Budget). He explained how the President could delay expenditures of federal money using apportionment of appropriated funds as political retribution against politicians who wouldn’t support the President’s programs. Delays in Federal expenditures have occurred regularly. The outright cancelation of spending seems to be another matter. To spend money in the Federal Government, it takes 2 bills: (1) an authorization bill and (2) an appropriations bill. These bills are approved by both the House and Senate and signed into law by the President. A President does not have the authority to unilaterally cancel expenditures. A President is not King, whether his name is Biden or Trump.” – M Stith

LOOK AT THE S&P 500 (Heritage Capital)
“Let’s look, yet again, at the S&P 500... Not much going on this week. It remains one good day from new highs. I would really like to see the bulls have enough energy to get that fresh high which I think would be a decent opportunity to reduce exposure or cut risk.” – Paul Schatz, President Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/inflation-hotter-as-expected/

RISING NEW LOWS IN THE NASDAQ (McClellan Financial Publications)
“This week's chart shows us that the numbers of Nasdaq stocks making 52-week New Lows has been ramping up higher recently. That is not the normal thing to see while prices are continuing to push to higher highs. The normal relationship is that when prices are higher, New Lows go down...
...We saw a similar ramp higher in Nasdaq New Lows back in late 2021, just before the bear market of 2022. This does not mean that we have to get the exact same outcome this time. But it does serve as a warning that things are not acting normally...” Analysis and charts at...
https://www.mcoscillator.com/learning_center/weekly_chart/rising_new_lows_in_the_nasdaq/
My cmt: We’ve noticed a similar issue on the NYSE and that is why there was a Hindenburg Omen Wednesday. I might also note that both of my New-high/New-low indicators have been bearish for both long-term and short-term durations.

PPI
The producer price index, which measures what producers get for their goods and services, increased by a seasonally adjusted 0.4% on the month, compared with the Dow Jones estimate for 0.3%... Excluding food and energy, the core PPI was up 0.3%, in line with the forecast... Over the past year, the all-items PPI increased 3.5%, well ahead of the central bank’s objective.
https://www.cnbc.com/2025/02/13/ppi-january-2025-.html

JOBLESS CLAIMS (YahooFinance)
“Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 213,000 for the week ended February 8, the Labor Department said on Thursday. Economists polled by Reuters had forecast 215,000 claims for the latest week.” Story at...
https://ca.finance.yahoo.com/news/us-weekly-jobless-claims-decline-134014252.html

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Thursday the S&P 500 rose about 1% to 6115.
-VIX declined about 5% to 15.10.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.533%.

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20/2024.
QLD – added 12/20/2024. (IRA acct.)
NVDA – added 1/6/2025.

The decline in Nvidia appears to be overblown. Regarding competition to Nvidia, Dan Ives (Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities) says, “The threat is minimal.” He recommended buying Nvidia. I will hold NVDA and see what develops...

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 12 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
I must admit that if you had told me beforehand that PPI would come in below expectations and the S&P 500 would be up around 1%, I wouldn’t have believed it - but that’s what happened today. Further, advancing stocks outpaced decliners by over 3 to 1; advancing volume outpaced declining volume by more than 2 to 1 and new-highs were about double new-lows. The Index closed only 0.1% below its all-time high. Wow. Indicators improved too.

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 is still falling, a bearish sign.

Wednesday’s Hindenburg Omen was cancelled today because the McClellan Oscillator also improved above zero.

Thursday 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. Tops almost always occur on Statistically-significant, up-days, but not all statistically-significant, up-days occur at tops. Today could be a short-term top, but there was only 1 top indicator that was bearish, not enough to send a top-signal.

If the S&P 500 makes a new high we’ll get some added information about the health of markets. For now, markets appear unsettled.

BOTTOM LINE
I am still Neutral – 60% in stocks.

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.)

Wednesday, February 12, 2025

CPI ... Crude Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators declined to a Bearish -11 (11 more Bear indicators than Bull indicators). The 10-dMA of the spread is still falling, a bearish sign.

Wednesday there was another bearish Hindenburg Omen. It’s valid because the McClellan Oscillator also turned down today.
Hindenburg Omen: (https://www.investopedia.com/terms/h/hindenburgomen.asp).
As we’ve noted before, the Omen sends a lot of false warnings. The short-term, Fosback New-high/new-low Logic indicator uses a similar analytic approach. It is not yet giving a bearish signal although it is elevated.

Breadth declined today and the 50-dMA of issues advancing on the NYSE has been below 50% for three consecutive days. That triggers a “bear now” warning, however, that’s probably an overblown signal.

The S&P 500 is 0.8% above its 50-dMA; if the index drops below the 50-day, selling could pick up. So far, investors don’t seem concerned - VIX went down today even though the S&P 500 was down.

The S&P 500 is only 1.1% below its all-time high just 3 weeks ago. So far this “pullback” has been a sideways move.

The 50-dMA is an action point. So far, this appears to be an ordinary trip to the lower, trendline/50-dMA. If those support points are broken it suggests further declines, because indicators are quite negative.

BOTTOM LINE
I am still Neutral – 60% in stocks.

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.)