Retail Sales ... Empire State 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.
 
“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.
 
A LOW WAS FORMED (Heritage Capital)
“It certainly looks like “A” low was formed last week. However, the decline still does not look complete. There are a number of possible scenarios going forward with a rally and another decline to new lows being the highest probability. That would let a lot of other indicators line up for a multi-month rally, possibly to new highs. For now, being nimble is the best option. And to repeat and reiterate, this decline is a growth scare which began with Wal-Mart’s announcement last month. The lazy pundits and companies are hiding behind tariffs as an excuse. They are wrong as usual.” – Paul Schatz, President Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/a-low-has-been-seen/
My cmt: “A” low, but not “The” low.
 
JP MORGAN BLAMES THE QUAINTS (Fox Business)
"... credit markets are sending a less recessionary signal than equities and a bond benchmark... If one puts more weight on credit markets and dismisses U.S. recession risk, what then explains the correction in U.S. equities and in particular Nasdaq? Looking across investor types, retail investors are unlikely to be the culprits," the analysts wrote. ‘As we highlighted in our recent publications, retail investors continued their 'buying the dip' behavior over the past three weeks. In our mind the most likely culprits are equity hedge funds and in particular two categories: Equity Quant hedge funds and Equity TMT Sector hedge funds,’ the analysts said... ‘And if U.S. equity ETFs continue to see mostly inflows as they have thus far, there is a good chance that most of the current U.S. equity market correction is behind us,’ they added.” Story at...  
Market sell-off hasn't been driven by recession fears, JPMorgan analysis finds
 
EMPIRE STATE MANUFACTURING (Yahoo Finance)
“Factory activity in New York State plummeted this month by the most in nearly two years, a survey showed on Monday, with new orders falling sharply and input prices climbing at the fastest rate in more than two years in the latest sign the economy may be weakening. The Federal Reserve Bank of New York said its Empire State manufacturing index plunged by nearly 26 points...” Story at...
https://finance.yahoo.com/news/york-state-factory-activity-plunges-123712396.html
 
RETAIL SALES (CNBC)
“Retail sales increased 0.2% on the month, better than the downwardly revised decline of 1.2% the prior month but below the Dow Jones estimate for a 0.6% rise..” Story at...
https://www.cnbc.com/2025/03/17/retail-sales-increased-0point2percent-in-february-less-than-expected.html
 
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Monday the S&P 500 rose about 0.6% to 5675.
-VIX fell about 6% to 20.51.
-The yield on the 10-year Treasury declined to 4.299%.
 
MY TRADING POSITIONS:
None
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 11 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
As we noted Saturday, Friday’s 90% up-volume day would have been significant had this decline included two prior 90%, down-volume days. That would have been an outright “buy” signal. As it is, we are left with more unknowns: snap-back rallies can be fierce as short positions are unwound and the dip-buyers jump in, followed by more selling as the gloom returns. Was Thursday “the” low, or just a snap-back rally?
 
We nearly got another clear, buy-signal on today’s volume.  The up-volume was high at 87%, but momentum declined at the end of trading so we wouldn’t have gotten a buy-signal even if Monday had been a 90% up-volume day. Two 90% up-volume days in a row (with momentum) would have been a buy signal.
 
The daily, bull-bear spread of 50-indicators improved, to a Neutral -3 (3 more Bear indicators than Bull indicators). The 10-dMA of the spread reversed higher – a bullish sign. When I first automated the 50-indicator ensemble, I thought I might be able t just trade the 10-dMA of the indicator spread.  That has not been proven.  Reversals of the 10-day spread have occurred during corrections well before the bottom. While it’s good to see improvement, we can’t rule out the possibility that this is a not a valid sign. To get more clues, some like to look at the news.
 
My efforts are focused on technical analysis. I find it hard to interpret news. The news may seem straight forward, but how the markets will interpret any given news event can be a puzzle. Friday, Michigan Consumer Sentiment number was weak and today’s news was bad, too: weaker than expected retail sales and falling NY manufacturing - yet markets continued higher.  That is considered bullish, but it is not yet clear that the downward trend has changed. Today’s move may be just a counter-trend rally before selling starts again.
 
My bottom-calls are best when the market makes a lower-low and then analyzing internals at the low. These so-called re-tests almost always occur during corrections. If we get a re-test, then we may get the information needed to make a call. If not, we can look for signals that the market is taking off without a retest. That will take a bit longer.
 
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. I’ll consider adding to stocks Tuesday if the markets continue higher and indicators improve.
 
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

MONDAY 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.