ISM Manufacturing ... Construction Spending ... 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.
 
"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).
 
REPUBLICANS WOBBLY ON WORK (WSJ-excerpt)
“In 1996 a Republican Congress passed, and President Clinton signed, a bipartisan bill imposing a work requirement of 30 hours a week for households with at least one working-age parent and 35 hours a week for households with two parents as a condition for receiving benefits under the Temporary Assistance for Needy Families program. Today, inflation-adjusted federal welfare spending is 2.7 times its 1996 level, the budget deficit is nine times as high, and the federal debt is four times as large. Polling data show unprecedented support for work requirements. Yet the welfare reform in the House reconciliation bill, which is now pending in the Senate, merely requires 20 hours a week as a condition for able-bodied working-age adults with no dependents to receive Medicaid and expands the current 30-hour requirement of the Supplemental Nutrition Assistance Program, to more beneficiaries. Why are these GOP work requirements weaker than those a Democratic president backed?” - Phil Gramm and Michael Solon. Mr Gramm is former chairman of the Senate Banking Committee, is a visiting scholar at the American Enterprise Institute. Mr. Solon is a senior fellow at the Hudson Institute. Commentary at...
https://www.wsj.com/opinion/republicans-go-wobbly-on-work-fff6703b?gaa_at=eafs&gaa_n=ASWzDAh_9__vZr6zgvsnd2XdeMIVFHZOBS-PJU6t-DVUDiCNGbD5S_Bm4lq5LvMq4WA%3D&gaa_ts=68633c2e&gaa_sig=MVQqU3CUIUhxAZgM_dpUZ77qp2ozn_Nc3tPDeZBKKcrniLtatwUCfKmwwyLjDKss0WvyN-O5ciKRDFAB8oBL4A%3D%3D
 
ISM MANUFACTURING (ISM)
“Economic activity in the manufacturing sector contracted in June for the fourth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®...“In June, U.S. manufacturing activity slowed its rate of contraction, with improvements in inventories and production the biggest factors in the 0.5 percentage point gain in the Manufacturing PMI®.” Report at...
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/june/
 
CONSTRUCTION SENDING (ENR)
“Total construction spending fell for the fourth consecutive month in May, according to data released by the U.S. Census Bureau. Since April, spending fell 0.3%, while the year-over-year decline reached 3.5%. ‘Uncertainty about tariffs, tax rates and labor availability are making it hard for many developers to risk moving forward with planned construction projects...’” Story at...
https://www.enr.com/articles/60973-construction-spending-continued-to-decline-in-may
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 declined about 0.1% to 6198.
-VIX rose about 0.6% to 16.83.
-The yield on the 10-year Treasury rose to 4.242% (compared to about this time prior market day).
 
MY TRADING POSITIONS:
SPY – added 6/5/2025 & 6/27/2025
XLK – added 6/27/2025
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 4 gave Bear-signs and 20 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.)

COMMENT
The daily, bull-bear spread of 50-indicators declined, but remained bullish at +16 (16 more Bull indicators than Bear indicators). I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread continued higher – a bullish sign.
 
It’s not surprising to see some decline in indicators. They don’t remain super-bullish for very long and +18, yesterday’s value was very bullish. A small decline from extreme highs is normal and is not a sign of weakness unless there is a reversal in trend.
 
Tuesday, 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, but the indicators have been very bullish. “High-unchanged-volume” is not one of my indicators because it is often wrong.
 
One of the new bear indicators was the buying-pressure minus selling pressure indicator.  Moving averages of selling-pressure slightly exceeded buying-pressure.  The difference was so small that it’s probably not significant. We’ll need to follow this indicator to see if it makes a significant decline. Overall though, indicators look good.
 
I increased stock holdings Friday, based on good signs from indicators, raising my investment in stocks to about 55% of the portfolio.
 
BOTTOM LINE
I am cautiously Bullish. Cautiously, because of tariffs and their impact on inflation.
 
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 BUY. (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 55% 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.