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Markets are closed for the Fourth of July. Have a good day and stay safe.
 
“I am apt to believe that it [Fourth of July] will be celebrated, by succeeding Generations, as the great anniversary Festival. It ought to be commemorated, as the Day of Deliverance by solemn Acts of Devotion to God Almighty. It ought to be solemnized with Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other from this Time forward forever more.
You will think me transported with Enthusiasm but I am not. -- I am well aware of the Toil and Blood and Treasure, that it will cost Us to maintain this Declaration, and support and defend these States. -- Yet through all the Gloom I can see the Rays of ravishing Light and Glory. I can see that the End is more than worth all the Means. And that Posterity will tryumph in that Days Transaction, even altho We should rue it, which I trust in God We shall not.” – John Adams, excerpt of 3 July letter to Abigal Adams.
My cmt: Adams originally thought the 2^nd would be a day of great celebration, that being the day the Continental Congress voted to break with Britain. He later realized the significance of the signing of the Declaration of Independence.
 
“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).
 
A CAPITULATION BY THE LAST HOLDOUTS MAY DRIVE THE MARKET HIGHER (MarketWatch)
“During the last 60 years, a more than 20% gain for the S&P 500 in a two-month time period has happened only six other times, Pat Tschosik chief thematic strategist and London Stockton, analyst at Ned Davis Research, told clients in a new note. Despite this impressive performance, the pair sense a lack of investor wow-factor out there, likely due to some remaining pessimists. In our call of the day, Tschosik and Stockton say those bearish holdouts — they point the finger at investors who are Democrats — could open the door to another rally when they finally capitulate.” Story at...
The last holdout bears are Democrats, these strategists say. Their capitulation could fuel the next leg higher for stocks.
 
PAYROLL REPORT / UNEMPLOYMENT RATE (CNBC)
“Job growth proved better than expected in June, boosted by government hiring, as the labor market showed surprising resilience and likely took a July interest rate cut off the table. Nonfarm payrolls increased a seasonally adjusted 147,000 for the month...The unemployment rate fell to 4.1%...” Story at...
https://www.cnbc.com/2025/07/03/jobs-report-june-2025.html
 
DURABLE GOODS (Advisor Perspectives)
“New orders for manufactured durable goods rose to $343.59B in May, its highest level in history. This represents a 16.4% increase from the previous month, the largest monthly jump since 2014, and a 19.8% rise from one year ago...” Commentary and analysis at...
https://www.advisorperspectives.com/dshort/updates/2025/06/26/durable-goods-orders-surge-16-4-in-may
 
ISM NON-MANUFACTURING (ISM via PRnewswire)
“Economic activity in the services sector grew in June after just one month of contraction, say the nation's purchasing and supply executives in the latest Services ISM^® Report On Business^®. The Services PMI^® indicated expansion at 50.8 percent, above the 50-percent breakeven point for 11th time in the last 12 months.” Press release at...
https://www.prnewswire.com/news-releases/services-pmi-at-50-8-june-2025-services-ism-report-on-business-302497305.html
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.8% to 6279.
-VIX declined about 2% to 16.38.
-The yield on the 10-year Treasury rose to 4.348% (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, 5 gave Bear-signs and 21 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.)
 
There was one new bear indicator Friday; Bollinger Bands are overbought. I’ll ignore it until RSI is also overbought.

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators declined slightly, 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.
 
Here’s an interesting chart below. The 15-ETFs that I track for the daily momentum chart (ETF Momentum: Percentile Rank) are a cross section of the overall market. Curiously, when all 15 of those ETFs are above their own 120-day moving averages (120-dMA) (the red line hits 100% on the left axis) the overall market is usually at, or near, a top. It doesn’t have to be a major top; it might only signal a drop of 3-5%. But sometimes, it can warn of a more significant decline. This indicator is not in my 50-indicator ensemble; however, it is one of my Top-Indicators.

Another worry in the above chart is the slope of the current trendline channel. The S&P 500 is going parabolic. Note how much steeper the trendlines are since the April low compared to the trendline from the October 23 low.
 
Sentiment is also stretched. I would not be surprised to see a correction of less than 10% this summer or fall.  It’s too soon to try to anticipate such a move - we’ll need to see more bearish indicators before we get a top warning.
 
The S&P 500 made a new, all-time high today, Thursday. One measure of breadth is the % of new, 52-week-highs.  Today, 6.8% of issues traded on the NYSE made new-52-week highs. That is in line with the average new, 52-week-highs that we typically see at all-time highs. By that measure, breadth looks good. It is certainly not signaling a problem with markets.
 
I increased stock holdings last 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
 
THURSDAY 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.