"Don't criticize what you can't understand." – Bob Dylan
Quick now...What’s the song reference?
"Think of how stupid the average person is, and
realize half of them are stupider than that."- George Carlin
“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.
"This is maybe the most dangerous market of my
career, and that includes 1987's crash, that includes the savings and loan
debacle market of the early '90s, that includes the 1999 to 2009 lost decade in
the S&P 500 in the dot-com bubble. This is the most difficult market of my
45 years." - Bill Smead, Smead
Value Fund (SMVLX).
“The tariffs and the potential for a trade war, I think,
is really the only risk to the market right now. It’s completely binary, and I
really have no way of handicapping it... “Nobody wanted World War I, and yet,
because of all the reciprocal treaties that existed between countries, they
somehow ended up there. I don’t think anybody wants a trade war, but it’s
certainly possible.” – Steve “Big Short” Eisman speaking on CNBC. He was
played by Steve Carell in the movie, “The Big Short.”
SENATOR RON JOHNSON-THE WHITE HOUSE IS MAKING MISLEADING
CLAIMS (NY Post)
“Sen. Ron Johnson (R-Wis.), a former accountant, unveiled a detailed analysis of the One Big Beautiful Bill Act and concluded that the Republican-backed measure will blow up the deficit — despite opposite claims coming from the White House about its budgetary effects... The Wisconsin senator, who has opposed the House-passed version of the One Big Beautiful Bill Act in its current form due to its deficit impact, hinted that he is flexible on a lot of the details of the legislative but needs it to get “spending under control.”... Story at...
Sen. Ron Johnson tears into White House’s ‘misleading’ claims about the true cost of Trump’s ‘big beautiful’ bill
ECONOMIC DISASTER (FOX Business)
“According to Schiff [Peter Schiff, Euro Pacific Asset Management Chief Economist], the "big problem" for inflation is "all of the inflation chickens that the Fed has been releasing for more than a decade are coming home to roost...We have a lot of dollars sloshing around the world thanks to years and years of artificially low interest rates and quantitative easing, and more of those dollars are going to be coming home as foreigners get out of U.S. financial asset," Schiff told Claman. "You’re seeing a global exodus out of U.S. stocks, out of U.S. bonds, and all that cash is going to come back home, bidding up prices."
... "It means stock prices come down, real estate prices go down, companies fail," he added. "There’s going to be bankruptcies. There’s going to be defaults. There’s going to be a protracted recession, probably a much worse financial crisis than 2008, but all that has to happen because the alternative to that is even worse." Story at...
Top economist warns America is heading toward economic disaster the Fed can't fix
My cmt: I hope this guy is wrong! We do need to keep in mind that Schiff is a “perma-bear.” He may be right eventually – just not now.
PHILLY FED MANUFACTURING (Philadelphia FED)
“Manufacturing activity in the region remained weak, according to the firms responding to the June Manufacturing Business Outlook Survey. The survey’s indicator for current general activity remained slightly negative, unchanged from May... The survey’s future indicators suggest less widespread expectations for growth over the next six months... Over 41 percent of the firms reported increases in input prices, while none reported decreases; 58 percent of the firms reported no change.” Report at...
https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/mbos-2025-06
LEADING ECONOMIC INDEX (Conference Board)
“The LEI for the US fell again in May, but only marginally,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “...consumers’ pessimism, persistently weak new orders in manufacturing, a second consecutive month of rising initial claims for unemployment insurance, and a decline in housing permits weighed on the Index, leading to May’s overall decline...we do expect a significant slowdown in economic growth in 2025 compared to 2024, with real GDP growing at 1.6% this year and persistent tariff effects potentially leading to further deceleration in 2026.” Report at...
https://www.conference-board.org/topics/us-leading-indicators
“President Donald Trump said Friday that Iran had a
“maximum” of two weeks to avoid possible US air strikes, indicating he could
make a decision before the fortnight deadline he set a day earlier.” From...
https://punchng.com/trump-gives-iran-two-weeks-to-avoid-us-airstrikes/
MARKET REPORT / ANALYSIS
-Friday the S&P 500 declined about 0.2% to 5968.
-VIX rose about 2% to 20.62.
-The yield on the 10-year Treasury declined to 4.379% (compared to about this time prior market day).
MY TRADING POSITIONS:
SPY – added 6/5/2025
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 10 gave Bear-signs and 12 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 were unchanged from Wednesday and remained in Neutral territory at +2 (2 more Bull indicators than Bear indicators). I consider +5 to -5 the neutral zone. The 10-dMA of the spread continued down – a bearish sign. One can see from the above chart, a breakdown of the 10-dMA of Spread (purple line) often indicates a declining market.
Friday, there was high, unchanged-volume. I know, you’re
tired of reading my standard note:
As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. Are markets turning back down? That could always happen and the indicators are trending down now. Still, “High-unchanged-volume” is not one of my indicators because it is often wrong.
Bear signs have not changed much:
-Up-volume is trending down.
-S&P 500 is too far ahead of Breadth.
-MACD OF S&P 500 price.
-Money Trend.
-New-high/New Low data
-McClellan Oscillator.
-Smart Money.
-Cyclical Industrials are Underperforming the S&P 500
For now, I’ll worry if the S&P 500 significantly
violates its lower trend-line. The S&P 50 has either broken below its lower
trendline, or not, depending on the scales used to draw the charts. I’m going
to say that the Index is at its lower trendline now.
I’m still looking for new highs, but we’ll see. The
S&P 500 is about 2.9% below its all-time high of 6144 on 19 February and it
has been in this zone for a while.
Trump is considering joining Israel in its war with Iran
and has given a 2-week timeline to make the decision with a 2-week
ultimatum to Iran - Make a deal or we’ll smoke you. Markets are trying to digest
that news and who knows where we go from here. Markets appear concerned, but
not panicked.
BOTTOM LINE
I am Neutral.
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 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 50% stocks, including stock mutual funds and ETFs. 50% invested in
stocks is a normal, conservative position for a retiree. (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.
“Sen. Ron Johnson (R-Wis.), a former accountant, unveiled a detailed analysis of the One Big Beautiful Bill Act and concluded that the Republican-backed measure will blow up the deficit — despite opposite claims coming from the White House about its budgetary effects... The Wisconsin senator, who has opposed the House-passed version of the One Big Beautiful Bill Act in its current form due to its deficit impact, hinted that he is flexible on a lot of the details of the legislative but needs it to get “spending under control.”... Story at...
Sen. Ron Johnson tears into White House’s ‘misleading’ claims about the true cost of Trump’s ‘big beautiful’ bill
“According to Schiff [Peter Schiff, Euro Pacific Asset Management Chief Economist], the "big problem" for inflation is "all of the inflation chickens that the Fed has been releasing for more than a decade are coming home to roost...We have a lot of dollars sloshing around the world thanks to years and years of artificially low interest rates and quantitative easing, and more of those dollars are going to be coming home as foreigners get out of U.S. financial asset," Schiff told Claman. "You’re seeing a global exodus out of U.S. stocks, out of U.S. bonds, and all that cash is going to come back home, bidding up prices."
... "It means stock prices come down, real estate prices go down, companies fail," he added. "There’s going to be bankruptcies. There’s going to be defaults. There’s going to be a protracted recession, probably a much worse financial crisis than 2008, but all that has to happen because the alternative to that is even worse." Story at...
Top economist warns America is heading toward economic disaster the Fed can't fix
My cmt: I hope this guy is wrong! We do need to keep in mind that Schiff is a “perma-bear.” He may be right eventually – just not now.
“Manufacturing activity in the region remained weak, according to the firms responding to the June Manufacturing Business Outlook Survey. The survey’s indicator for current general activity remained slightly negative, unchanged from May... The survey’s future indicators suggest less widespread expectations for growth over the next six months... Over 41 percent of the firms reported increases in input prices, while none reported decreases; 58 percent of the firms reported no change.” Report at...
https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/mbos-2025-06
LEADING ECONOMIC INDEX (Conference Board)
“The LEI for the US fell again in May, but only marginally,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “...consumers’ pessimism, persistently weak new orders in manufacturing, a second consecutive month of rising initial claims for unemployment insurance, and a decline in housing permits weighed on the Index, leading to May’s overall decline...we do expect a significant slowdown in economic growth in 2025 compared to 2024, with real GDP growing at 1.6% this year and persistent tariff effects potentially leading to further deceleration in 2026.” Report at...
https://www.conference-board.org/topics/us-leading-indicators
https://punchng.com/trump-gives-iran-two-weeks-to-avoid-us-airstrikes/
-Friday the S&P 500 declined about 0.2% to 5968.
-VIX rose about 2% to 20.62.
-The yield on the 10-year Treasury declined to 4.379% (compared to about this time prior market day).
SPY – added 6/5/2025
Today, of the 50-Indicators I track, 10 gave Bear-signs and 12 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 were unchanged from Wednesday and remained in Neutral territory at +2 (2 more Bull indicators than Bear indicators). I consider +5 to -5 the neutral zone. The 10-dMA of the spread continued down – a bearish sign. One can see from the above chart, a breakdown of the 10-dMA of Spread (purple line) often indicates a declining market.
As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. Are markets turning back down? That could always happen and the indicators are trending down now. Still, “High-unchanged-volume” is not one of my indicators because it is often wrong.
-Up-volume is trending down.
-S&P 500 is too far ahead of Breadth.
-MACD OF S&P 500 price.
-Money Trend.
-New-high/New Low data
-McClellan Oscillator.
-Smart Money.
-Cyclical Industrials are Underperforming the S&P 500
I am Neutral.
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
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
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.
