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

 

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.” - Peter Lynch, former manager of Fidelity’s Magellan® fund.
 
“The trouble with trade wars is that once they begin they can quickly escalate and get out of control. All the more so when politicians are nearing an election campaign, as Canada now is. Or when Mr. Trump behaves as if his manhood is implicated because a foreign nation won’t take his nasty border taxes lying down. We said from the beginning that this North American trade war is the dumbest in history, and we were being kind.” – WSJ Editorial Board.
 
“For more than two centuries, it has been established that impeachment is not an appropriate response to disagreement concerning a judicial decision. The normal appellate review process exists for that purpose.” – Chief Justice John Roberts in response to Trump’s post to impeach the deportation judge, James E. Boasberg.
 
PRESIDENTIAL CYCLE DEVIATIONS (McClellan Financial Publications)
“...an incumbent who wins typically does not spend much time blaming his predecessor for things being bad, and so the stock market generally performs better in the first year of a president's second term than with a new president.  Eventually the performance all equals out later in the terms of each type of president, but for a while there is a significant difference, on average.
We are now seeing an even more significant difference thanks to President Trump's actions on international trade.  Because traders have never lived through a set of changes like what we are seeing now, it makes people uncomfortable because they do not know what to think about it.  So they sell their stocks and seek the safety of cash to assuage their uncertainty.  That is a normal human reaction.” – Tom McClellan. Commentary at...
https://www.mcoscillator.com/learning_center/weekly_chart/deviation_from_the_presidential_cycle_patterns/
My cmt: The point of the commentary was to note that the usual Presidential Cycle is not a good market predictor this time.
 
RISK OF RECESSION RISING (CNBC)
“Respondents to the March CNBC Fed Survey have raised the risk of recession to the highest level in six months, cut their growth forecast for 2025 and hiked their inflation outlook... The outlook for the S&P 500 declined for the first time since September. The 32 survey respondents, who include fund managers, strategists and analysts, raised the probability of recession to 36% from 23% in January.
https://www.cnbc.com/2025/03/18/slower-economic-growth-is-likely-ahead-with-risk-of-a-recession-rising-according-to-the-cnbc-fed-survey.html
 
HOUSING STARTS / PERMITS (Yahoo Finance)
“Single-family housing starts, which account for the bulk of homebuilding, surged 11.4% to a seasonally adjusted annual rate of 1.108 million units last month... Permits for future construction of single-family housing fell 0.2% to a rate of 992,000 units in February.”
https://finance.yahoo.com/news/us-housing-starts-rebound-strongly-124156741.html
 
INDUSTRIAL PRODUCTION (MarketWatch)
“Industrial production rose 0.7% in February, the Federal Reserve reported Tuesday.
The gain was above economists’ expectations for a 0.3% rise, according to a survey by the Wall Street Journal.” Story at...
https://www.marketwatch.com/story/industrial-output-jumps-0-7-in-february-fueled-by-auto-production-c11fe65d
 
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Tuesday the S&P 500 fell about 1.1% to 5615.
-VIX rose about 6% to 21.70.
-The yield on the 10-year Treasury declined to 4.285% (compared to about this time prior market day).
 
MY TRADING POSITIONS:
None
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 11 gave Bear-signs and 9 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)
 

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators improved to a Neutral -2 (2 more Bear indicators than Bull indicators). The 10-dMA of the spread improved again – a bullish sign. The numbers may change tonight when we get the Sentiment numbers for the Rydex/Guggenheim Bull/Bear analysis. Sentiment is very close to overly bearish and that would be a bullish sign, if the {bull/(bulls+bears)} sentiment deteriorates. It doesn’t make much difference – another bull-sign still would leave the indicators in a Neutral position, but Sentiment is one of those important indicators that suggest markets are closer to a bottom. There were Sentiment buy-signals both before (several % early) and after the bottom of the 10% correction in October 2023.
 
The S&P 500 retraced 25% of its losses as of the close Monday, slightly more than the 23.6% first Fibonacci retracement value, for those who believe in that sort of thing. The Index closed 2.2% below its 200-dMA Tuesday.
 
Unchanged-volume was very high today. As I’ve often said (and you’re probably tired of reading it), many believe that this indicator suggests investor confusion at market turning points. Are markets turning back up? It’s always possible, but the best we can say is that investors are confused, as one would expect in a acorrection. “High-unchanged-volume” is not one of my indicators because it is often wrong.
 
I hope the market will make a lower-low so I can get a clearer idea of where the markets are headed. I’d rather not see the S&P 500 close above its recent high of 5675. That would leave me in doubt and might suggest “correction over,” but I wouldn’t have the data to back up any conclusion.
 
BOTTOM LINE
No bottom call yet. Given the indicator improvement I am Neutral on the market with a very conservative allocation of only about 30% invested in stock holdings.
 
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:
 

The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
 
DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)
 

The top ranked Stock receives 100%. The rest are then ranked based on their momentum relative to the leading Stock.
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
 
TUESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 – extreme bearish. (I’ll need to recalculate the %.) 50% invested in stocks is a normal position. (75% is my max stock allocation when I am confident that markets will continue higher; 30% in stocks is my Bear market position.)
                                             
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, I add a lot more stocks to the portfolio, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.