PPI ... Jobless Claims ... 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.
 
WILL TRUMP TARIFFS CAUSE A CRASH? (The Motley Fool via msn.com)
“Trump during his first term imposed tariffs that ultimately raised the average tax on U.S. imports from 1.4% in 2017 to 2.7% in 2019. That 1.3-point bump pales in comparison with the 11.3-point increase his current plans imply. Yet the S&P 500 still suffered an intrayear drawdown of 19.8% in 2018 as the market contemplated Trump's agenda.
That data has worrisome implications for the U.S. stock market today, at least in the near term. If a relatively small increase in the average tariff rate between 2017 and 2019 led to a 19.8% declined in the S&P 500, then more aggressive changes to trade policy Trump has outlined this time may trigger a much steeper decline...
...Here's the bottom line: History says Trump's tariffs could drag the S&P 500 lower, perhaps much lower, but there is a chance the stock market could recover quickly. Investors should treat the ongoing drawdown as an opportunity to buy their highest-conviction stocks. But it makes sense to move slowly, rather than investing huge sums of money all at once.” Story at...
Will the Stock Market Crash As President Trump's Tariffs Take Effect? History Offers a Clue.
 
NO MORE BUY THE DIP (Bloomberg via msn.com)
“In a few short weeks, President Donald Trump has started silencing the buy-the-dip stock traders who set the tone on Wall Street for the better part of two decades.  In their place are growing calls to lock in profits and sit on the sidelines while Trump’s trade-war chaos upends the economic outlook — and casts uncertainty over who, if anyone, will emerge as the new era’s stock-market winners...
...market watchers say they don’t see some of the signs that generally indicate a meaningful rebound rally is in the works. That includes what’s known as capitulation...In fact, data from Bank of America Corp. show that clients bought stocks for a sixth straight week through last week. Junk-bond spreads aren’t at alarmingly levels. And the so-called fear gauge — the Cboe Volatility Index — shows volatility is increasing but not at red-flag levels.” Story at... 
‘Buy The Dip’ Calls Fade as Trump Selloffs Rattle Wall Street
 
PPI / CORE PPI (CNN)
“The PPI index was unchanged from January, and rose 3.2% for the 12 months ended in February, according to Bureau of Labor Statistics data released Thursday. That marked a sharp slowdown from January, when prices rose 0.6% and 3.7% for those respective periods... Excluding food and energy... core PPI fell 0.1% from January (when it sharply rose 0.6%), bringing the annual increase to 3.4%, down from a 3.8% rate the month before.”
https://www.cnn.com/2025/03/13/economy/us-ppi-producer-inflation-february/index.html
My cmt: This was generally good news.
 
JOBLESS CLAIMS (Reuters)
“Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 220,000 for the week ended March 8, the Labor Department said on Thursday.” Story at...
https://www.reuters.com/markets/us/us-weekly-jobless-claims-fall-amid-labor-market-stability-2025-03-13/
 
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Thursday the S&P 500 declined about 1.4% to 5522.
-VIX rose about 2% to 24.66.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.291%.
 
MY TRADING POSITIONS:
None
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 19 gave Bear-signs and 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
The daily, bull-bear spread of 50-indicators declined to a Bearish -16 (16 more Bear indicators than Bull indicators). The 10-dMA of the spread turned down –a bearish sign.
 
The S&P 500 made a new low; volume was lower, but there was little to no improvement in market internals suggesting that the decline has further to go.
 
The following chart from Ciovacco Capital shows the maximum pullback for each year going back 75 years. 40% of those pullbacks were 10% or less, so the 10% decline we’ve seen so far is fairly routine. The average drawdown was 14% with a median of 11%. As of today’s close, the S&P 500 was down 9.8% from its all-time high. The S&P 500 closed 3.8% below its 200-day, moving average.
 

As I write this, futures are calling for a bounce tomorrow – they’re up 0.7%. – but as we have noted, “Never on Friday.” Corrections rarely end on Friday. Investors are more likely to worry over the weekend and sell on Monday setting us up for a “Turning Tuesday” when the calmer heads decide its time to buy. Could it be this Tuesday? Maybe, but first we need to see a capitulation where there is panic with high-volume, and a big down-day.
 
BOTTOM LINE
No bottom yet. 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
 
THURSDAY MARKET INTERNALS (NYSE DATA)

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.) 
 
 
 

...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.