Leading Economic Indicators ... 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), May 2025.
LEADING ECONOMIC INDICATORS (Conference Board)
“The Conference Board Leading Economic Index® (LEI)
for the US declined by 0.3% in June 2025... “The US LEI fell further in June,”
said Justyna Zabinska-La Monica, Senior Manager, Business Cycle
Indicators, at The Conference Board. “For a second month in a row, the
stock price rally was the main support of the LEI. But this was not enough to
offset still very low consumer expectations, weak new orders in manufacturing,
and a third consecutive month of rising initial claims for unemployment
insurance... At this point, The Conference Board does not forecast a recession,
although economic growth is expected to slow substantially in 2025 compared to
2024.” Press release at...
https://www.conference-board.org/topics/us-leading-indicators/
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.1% to 6310.
-VIX declined about 1% to 16.50.
-The yield on the 10-year Treasury declined to 4.346%
(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, 10 gave Bear-signs and 14 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 remained
Neutral at +4 (4 more Bull indicators than Bear indicators). I consider +5 to
-5 the neutral zone. The 10-dMA curve of the spread remained heading down – a
bearish sign.
I commented a few weeks back that the S&P 500 was in
a parabolic rise - a bad sign. That condition hasn’t been resolved, although
the rate of rise has declined since we first mentioned it.
I noted yesterday that the % of new-52-week highs is a
very important stat when markets are making new all-time highs. Over the month
of July, the % of new, 52-week highs occurring at new, all-time highs for the
S&P 500 has been falling. It was 6.8% on 3 July. At each new high it has
been lower and today (Tuesday), only 2.8% of issues on the NYSE made new
all-time highs. That’s a low number and
suggests a correction of greater than 10%. The last time the % of 52-week highs
signaled a correction the signal was followed by a 19% correction, so we can’t
be happy now.
At that top in April, there were 7 top-indicators warning
of a top. Now there is only 1 top
indicator, so I think a top is coming soon, but markets may not be there yet.
In July of 2024 when we saw this indicator flash a warning,
it was about 2-weeks before the top of an 8.5% correction.
BOTTOM LINE
I expect a correction soon. I’ll reduce stock holdings
when more indicators decline.
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 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.
