Navigate the Stock Market: February 2025

Friday, February 28, 2025

PCE Price ... Chicago PMI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

From...
https://finance.yahoo.com/news/pce-inflation-gauge-matches-expectations-offering-relief-to-fed-134539849.html

CHICAGO PMI (Advisor Perspectives)
“The Chicago Purchasing Managers’ Index (Chicago Business Barometer) rose for a second straight month in February but remains historically low. The index increased to 45.5 from 39.5 in January, surpassing the 40.5 forecast. The index remained in contraction territory for a 15th consecutive month.” Commentary and charts at...
https://www.advisorperspectives.com/dshort/updates/2025/02/28/chicago-pmi-contracts-for-15th-consecutive-month

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Friday the S&P 500 rose about 1.6% to 5955.
-VIX fell about 7% to 19.63.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.203%.

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
The daily, bull-bear spread of 50-indicators improved to a Neutral -4 (4 more Bear indicators than Bull indicators). The 10-dMA of the spread continued falling, a bearish sign.

Bollinger Bands and RSI are both “oversold” yesterday so today we got the “oversold bounce.” Was yesterday the bottom? It could have been, but my guess is, not yet. Friday 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, so we might guess that Monday will be a down-day. Further, back and forth statistically significant up and down days are typical during corrections. That may be what we’re seeing now.

For the most part, volumes increased and internals declined (or didn’t improve enough) when the S&P 500 was near recent lows this week. We want to see internals improving at lows. Since we didn’t see that, I’ll stick with my assessment that the bottom is not in; and the news didn’t get any better today. Increased tariff threats, WWIII warnings (from Trump) and a Trump Zelensky blowup in the White House all added to a wild news day.

I could always be wrong. Small corrections give small signals and, so far, this is a small correction. As of Thursday, the S&P 500 was only down 4%.

BOTTOM LINE
I am bearish 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:

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 improved to HOLD. (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 – somewhat 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, February 27, 2025

Jobless Claims ... Durable Orders ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

TODAY’S COMMENT

Today’s chart was weak with a nasty selloff into the afternoon. Indicators slipped from mid-day too.

The daily, bull-bear spread of 50-indicators improved to a still Bearish -13 (13 more Bear indicators than Bull indicators). The 10-dMA of the spread continued falling, a bearish sign.

Some were suggesting that the decline would stop at the 100-day moving average (100-dMA) for the S&P 500, 5950. That didn’t happen. The next line of defense is the 200-dMA at 5716, only 2.5% lower than today’s close.

There were some bottom indicators today: Bollinger Bands and RSI are both “oversold.” That can be a good bottom indicator for small corrections, but indications are that this may not be a small correction. When I look for other bottom signs, I don’t see any.

Predicting how far markets may fall in a correction is mostly guesswork. I have only one indicator that helps. Breadth was very poor at the recent S&P 500 top and that suggests a drop from the top of more than 10%. As of Thursday (today), the drop from the top is 4.2%. Of course, there are no guarantees, but cutting risk makes sense. The important strategy for retirees (and most others) is to avoid losses, so I am now very conservatively invested.

BOTTOM LINE
I am bearish 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 declined to SELL. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Cutting Stock Holdongs

I sold Nvdia and my remaining position in XLK - ETF. That takes my stock holdings to a full on conservative 30% invested in stocks, including mutual funds and ETFs. This may be more conservative than is necessary, but I don't like that Breadth was poor at the recent all-time high on the S&P 500. That suggests a more than 10% drop from the top. I think Trump has markets upset, and with the US voting with China and Russia at the UN, one wonders whether this will embolden China to act against Taiwan.

Indicators improved today (as of 3 PM), but there are signs the bottom isn't in. We'll have to wait until after the close to check indicators. Indicators are based on closing data, but indicators aren't good at calling bottoms anyway.

Wednesday, February 26, 2025

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.

DEBT HAS BEEN THE RUIN OF GREAT POWERS (WSJ)
“What I call Ferguson’s Law states that any great power that spends more on debt service than on defense risks ceasing to be a great power. The insight is not mine but originates with the Scottish political theorist Adam Ferguson, whose “Essay on the History of Civil Society” (1767) brilliantly identified the perils of excessive public debt... The crucial threshold is the point where debt service exceeds defense spending, after which the centripetal forces of the aggregate debt burden tend to pull apart the geopolitical grip of a great power, leaving it vulnerable to military challenge. The striking thing is that, for the first time in nearly a century, the U.S. began violating Ferguson’s Law last year. Annual defense spending—to be precise, national defense consumption expenditures and gross investment—was $1.107 trillion in 2024, according to the Bureau of Economic Analysis (BEA), while federal expenditure on interest payments (the government long ago gave up on paying down principal) topped out at $1.124 trillion....
... History suggests that any sustained period when a great power spends more on interest payments than on military capabilities is likely to see its strategic rivals challenge its position.” - Niall Ferguson, Milbank Family Senior Fellow at the Hoover Institution at Stanford University and founder of the advisory firm Greenmantle.
My cmt: The piece suggests that Hitler attacked Britain when Britain violated Ferguson’s Law.
https://www.wsj.com/politics/policy/debt-has-always-been-the-ruinof-great-powers-is-the-u-s-next-02f16402

DOGE SAVINGS GONE IN UNEMPLOYMENT BENEFITS (Washington Examiner)
“The Trump administration has laid off tens of thousands of federal employees in an effort to save taxpayers money, but the government will still have to pay for these terminated employees' unemployment benefits, which could total billions of dollars. The White House is seeking to cut 10% of the federal workforce, having issued a request to cut all probationary employees, which could affect approximately 280,000 employees who’ve been employed for less than two years by the federal government.” Story at...
Trump mass layoffs could cost government billions of dollars in unemployment benefits
My cmt: I worked my entire career for DOD. My boss had a story about Government service: “There was a janitor working the night shift, unsupervised. The personnel office decided he needed a supervisor. When budget cuts required staffing reduction – they fired the janitor.” It’s a joke, but that’s what DOGE is doing now. They need to focus on efficiency and reduce management levels – not just fire people indiscriminately.

NEW HOME SALES (YahooFinance)
“Sales of new U.S. single-family homes fell more than expected in January as persistently high mortgage rates sidelined potential buyers, the latest indication that housing market and overall economic activity slowed early in the first quarter. The steep decline in new home sales, reported by the Commerce Department on Wednesday, also likely reflected the impact of snowstorms and extremely cold weather in much of the country last month... New home sales plunged 10.5%...” Story at...
https://finance.yahoo.com/news/us-home-sales-fall-sharply-151151798.html

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Wednesday the S&P 500 little changed at 5956.
-VIX declined about 2% to 19.10.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.268%.

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Cut position in half – Monday, 2/24.
QLD – Sold 2/25.
NVDA – added 1/6/2025.

From CNBC: “Nvidia reported fourth-quarter earnings after the bell on Wednesday that beat Wall Street expectations. The company also provided strong guidance for the current quarter. The company’s report and guidance signals that the chipmaker is confident it will be able to continue its historic run of growth driven by artificial intelligence well into 2025. Shares were flat in extended trading... Nvidia reported a 73% gross margin in the quarter, which was down three points on an annual basis. The company said the decline in gross margin was due to newer data center products that were more complicated and expensive.” Story at...
https://www.cnbc.com/2025/02/26/nvidia-nvda-earnings-report-q4-2025.html

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 20 gave Bear-signs and only 1 was 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 fell further to a Bearish -19 (19 more Bear indicators than Bull indicators). (I had a typo here yesterday – the spread was 16 yesterday.) The 10-dMA of the spread continued falling, a bearish sign. (The Bollinger Band indicator was neutral today.)

Of my 50-indicators, there was only 1 bull-indicator. The last time we saw only 1 bull-indicator was two days before the bottom of the 10% correction in October of 2023. I doubt that this is a bottom. The drop from the all-time high is only 2.7%. That’s not much when the indicators are solidly bearish and the breadth was poor at the all-time high last week. That poor breadth suggests we could see a decline more than 10%, but the indicator isn’t always right (none are). The last time it warned, there was an 8.5% decline.

Nvidia’s earnings call was good, but Nvidia didn’t respond after-hours. It may jump tomorrow, but on the other hand, when markets don’t respond to good news...that’s bad news.

Major support is not far below today’s close. The 200-dMA of the S&P 500 is 5713, only 4.3% lower.

BOTTOM LINE
I am bearish. I’ll watch market action tomorrow. I may reduce stock holdings again. Nvidia didn’t give us any bounce today after hours.

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

My basket of Market Internals improved to HOLD. (The only Bull indicator today is one of the Internals for this ensemble) (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 45% stocks, including stock mutual funds and ETFs – somewhat bearish. 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.

Tuesday, February 25, 2025

Consumer Confidence ... Richmond Fed Manufacturing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

Political cartoon by John Deering, chief editorial cartoonist for the Arkansas Democrat-Gazette

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.

“Things are not as they appear to be in Washington. While Elon Musk and the Department for Government Efficiency are trimming the fat, finding billions—if not trillions—in waste, fraud, and abuse, the Senate is rushing to pass a budget that increases spending. What gives?” – Senator Rand Paul, (R) Kentucky.

CHINA DISCOVERS ANOTHER CORONAVIRUS (RIA)
“... China, and most notoriously, the Wuhan Lab, reported the discovery of a new coronavirus in bats. To wit:
“Another coronavirus feared to be powerful enough to spread through humans has been discovered in China... The new virus is even closer related to MERS, a deadlier type of coronavirus that kills up to a third of people it infects. Virologist Shi Zhengli, known as ‘Batwoman’ for her work on coronaviruses, led the discovery, published in a top scientific journal.” Story at...
https://realinvestmentadvice.com/resources/blog/government-job-cuts-may-be-the-tip-of-the-iceberg/
My cmt: Let’s hope they don’t let this one out.

GOV JOB CUTS ARE JUST THE TIP OF THE ICEBERG (RIA)
“The coming unprecedented government job cuts will undoubtedly impact the job market. Given the labor market’s importance to Fed policy and the economy, it’s worth fully appreciating the size of the government workforce and other employees whose jobs might be affected... 3.8 million employees work directly for the government. Moreover, almost twice as many employees indirectly receive some or all of their wages from the government.
... direct and indirect job categories comprise over 11 million workers, about 8% of the total U.S. workforce (134 million). However, the impact will be far more significant than those jobs. To better appreciate the chain effect of government layoffs, let’s presume the government needs to buy 1 million fewer computers this year than last. In this case, those working for computer manufacturing and chip companies could be let go. Furthermore, for all of those laid off, whether they are government or otherwise, their spending habits will likely be curtailed. Accordingly, the impact will ripple throughout the economy. The bottom line is the 3.8 million government jobs are just the tip of the iceberg.” Commentary at...
https://realinvestmentadvice.com/resources/blog/government-job-cuts-may-be-the-tip-of-the-iceberg/

CONSUMER CONFIDENCE (Conference Board)
“‘In February, consumer confidence registered the largest monthly decline since August 2021,’ said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. ‘This is the third consecutive month on month decline, bringing the Index to the bottom of the range that has prevailed since 2022. Of the five components of the Index, only consumers’ assessment of present business conditions improved, albeit slightly. Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a ten-month high.’” Press release at...
https://www.conference-board.org/topics/consumer-confidence

RICHMOND FED COMP MANUFACTURING INDEX (Richmond Fed)
"Fifth District manufacturing activity improved somewhat in February, according to the most recent survey from the Federal Reserve Bank of Richmond.” Report at...
https://www.richmondfed.org/region_communities/regional_data_analysis/surveys/manufacturing

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Tuesday the S&P 500 declined about 0.5% to 5955.
-VIX rose about 2% to 19.43.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.298%.

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Cut position in half – Monday, 2/24.
QLD – Sold 2/25.
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, 19 gave Bear-signs and only 3 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
Nvidia may decide where the market goes. They report after the close of trading tomorrow, Wednesday.

The daily, bull-bear spread of 50-indicators fell further to a Bearish -19 (19 more Bear indicators than Bull indicators). The 10-dMA of the spread continued falling, a bearish sign. The only new bull-sign was the Bollinger Band indicator. Bollinger Bands are oversold, a bottom indicator, but RSI is not oversold and I use them together. The Bollinger Band indicator by itself is not indicating a bottom.

The S&P 500 again closed below its 50-dMA and indicators declined so, I trimmed stock holdings down to about 45% in the portfolio.

My work suggests we could see a decline more than 10%, but the indicator that suggests at least a 10% decline isn’t always right (none are). The last time it warned, there was an 8.5% decline.

BOTTOM LINE
I am bearish, but not convinced yet. If all the indicators giving bull-signs turn neutral or bearish, I’ll cut back on stock holdings again.

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.)

Sold More Stocks

I cut more stock holdings, but not drastically. I'm now at about 45% invested in stocks. Nvidia reports earnings tomorrow. That may be a test for the markets.

Monday, February 24, 2025

Trump Ukraine Double-Cross ... Dallas Fed Business Index ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“We realize that, if we stop resisting, we will face extermination and genocide—just as it already happened in our past.” - Olena Styazhkina, Ukrainian historian and writer.

US VOTES WITH RUSSIA AT UN (CNN)
“The United States joined Russia to vote against a UN General Assembly resolution condemning Russia’s war against Ukraine Monday in a stunning shift from years of US policy. The vote against the Ukrainian and European-backed resolution saw the US at odds with its longtime European allies and instead aligned with the aggressor in the war on the three-year anniversary of Moscow’s full-scale invasion of Ukraine.” Story at...
https://www.cnn.com/2025/02/24/politics/us-joins-russia-ukraine-un-vote/index.html
My cmt: WHY????? Answer below:
TRUMP ASKED ZELENSKY TO INVESTIGATE BIDEN (NBC News - 2019)
“President Donald Trump, in a midsummer phone call with Ukrainian President Volodymyr Zelenskiy, asked him to look into why that country's top prosecutor apparently had ended an investigation of the business dealings of Joe Biden’s son, who served on the board of a Ukrainian gas company.
"(Then-Vice President Joe) Biden went around bragging that he stopped the prosecution, so if you can look into it. ... It sounds horrible to me," Trump told Zelenskiy during the 30-minute July 25 phone call.” Story at...
https://www.nbcnews.com/politics/trump-impeachment-inquiry/trump-asked-ukraine-leader-phone-call-look-why-investigation-biden-n1058551
My cmt: Is the Ukraine double-cross just Trump’s revenge?

US Votes with Russia against ukraine? That looks like a high crime and misdemeanor to me.

DALLAS FED BUSINESS INDEX (Dallas Fed)
“Texas factory activity fell in February after rising notably in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell 21 points to -9.1. Other measures of manufacturing activity also declined this month. The new orders index fell 11 points to -3.5, and the capacity utilization index slid 14 points to -8.7. The shipments index remained positive but edged down to 5.6.” Dallas Fed report at...
https://www.dallasfed.org/research/surveys/tmos/2025/2502

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Monday the S&P 500 declined about 0.5% to 5983.
-VIX rose about 6% to 19.24.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.40%.

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Cut position in half – Monday, 2/24.
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, 15 gave Bear-signs and only 2 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 an ugly chart today. Late day action was poor to say the least.

Internals were weak too and the indicators followed them down. The daily, bull-bear spread of 50-indicators fell further to a Bearish -13 (13 more Bear indicators than Bull indicators). The 10-dMA of the spread continued falling, a bearish sign.

The S&P 500 closed below its 50-dMA and indicators declined so, I trimmed stock holdings down to 50% in the portfolio. I didn’t move until very late in the day and I wasn’t able to post my moves before the close of trading.

My work suggests we could see a decline more than 10%, but the indicator that suggests at least a 10% decline isn’t always right (none are). The last time it warned, there was an 8.5% decline.

Regarding the recent stock market weakness, the following is from a YouTube video by Chris Ciovacco of Ciovacco Capital.

From...
https://www.youtube.com/watch?v=AuoFJ4jvqP8

That could be, but I am taking the cautious view. “Additional consolidation” could be a problem. As of today’s close, the S&P 500 is only down 2.2% from its recent all-time high. Inflation, Economic weakness, high valuation, falling tech stocks – all have been blamed for the trading range the markets have been in. The S&P 500 is no higher now than it was in mid-November 2024. Could Trump’s antics be a cause of stock market weakness?

BOTTOM LINE
I am cautiously bearish, but still fully invested - 50% in stocks. If indicators continue down, I’ll make further reductions in stock holdings.

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.)

...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.

Friday, February 21, 2025

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.

DOGE FINDS BIDEN EPA GAVE $2 BILLION TO ? (Western Journal)
“Current EPA Administrator Lee Zeldin commented, ‘It’s extremely concerning that an organization that reported just $100 in revenue in 2023 was chosen to receive $2 billion. That’s 20 million times the organization’s reported revenue.’
Zeldin tied this grant to the Biden administrations scheme in parking $20 billion outside a financial institution shortly before leaving office, saying, ‘As we continue to learn more about where some of this money went, it is even more apparent how far-reaching and widely accepted this waste and abuse has been.’" Story at...
Trump Admin Makes 'Extremely Concerning' Discovery About Biden EPA - Billions Set Aside for Stacey Abrams-Linked Group

TRUMP’S UKRAINE SELLOUT? (WSJ-Excerpt)
“In recent days, Trump — who has cozied up with Russian President Vladimir Putin since the Kremlin interfered in the 2016 presidential election — has backed off the longtime stance the U.S. has held in solidarity with Europe to protect Ukraine from the yearslong, brutal Russian invasion, falsely suggesting Ukraine started the war and offering up "peace" proposals that one-sidedly give all concessions to Russia... The U.S. has a profound interest in denying Mr. Putin a new perch on more of the NATO border, which is the real reason America has been right to arm Ukraine. A deal that amounts to Ukrainian surrender will be a blow to American power that will radiate to the Pacific and the Middle East. It would be the opposite of Mr. Trump’s promise to restore a golden age of U.S. prestige and world calm... Last week Mr. Trump said Ukraine can’t join NATO and must give up much of its territory to Russia—concessions to Mr. Putin with nothing in return. Mr. Putin’s response this week has been more drone attacks on Ukraine. And here we thought Mr. Trump doesn’t like being played... As it stands now, Mr. Trump’s seeming desperation for a deal is a risk to Ukraine, Europe, U.S. interests—and his own Presidency.”- WSJ Editorial Board. Full opinion at...
https://www.wsj.com/opinion/donald-trump-vladimir-putin-russia-ukraine-volodymyr-zelensky-10464d9c?mod=opinion_lead_pos4

TRUMP ASKING FAR TOO MUCH OF UKRAINE (NY Post)
“President Trump’s demand that Ukraine sign over a huge chunk of its economy as repayment for help fending off Russia is flat-out wrong. Period.
The proposed contract, which reportedly hit Ukraine President Volodymyr Zelensky’s desk last week, demands half the country’s revenues from natural resources, ports and infrastructure indefinitely as payback for US military aid since the war began. That would quickly add up to countless billions more than we’ve given Ukraine; it’s a demand that a victor might make of a country that started and lost a war, to teach a lesson.
Indeed, as a share of GDP, it looks to be harsher than what the victorious allies imposed on Germany in the Peace of Versailles after World War I.” Story at...
https://nypost.com/2025/02/18/opinion/trump-is-asking-for-far-too-much-payback-from-war-torn-ukraine/

EXISTING HOME SALES (NAR)
“Existing-home sales fell 4.9% month-over-month to a seasonally adjusted rate of 4.08 million in January 2025. Year-over-year, sales improved 2.0%.” Press release from...
https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales

MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Friday the S&P 500 declined about 1.7% to 6013.
-VIX rose about 17% to 18.38.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.431%.

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, 15 gave Bear-signs and 5 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
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:

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.)