“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.
"She [Ghislaine Maxwell] might as well have taken
out Donald Trump, or President Trump, and said, 'The man who can pardon me has
never done anything wrong. The man who can pardon me has always been
wonderful...I don't think Donald Trump had anything to do with Jeffrey Epstein
that was untoward or illegal,’ but we're going to believe Ghislaine
Maxwell?" - Chris
Christie, Former New Jersey Gov.
TRUMP’S VENDETTA (WSJ)
“President Trump promised voters during his campaign for
a second term that he had bigger things on his mind than retribution against
opponents. But it is increasingly clear that vengeance is a large part, maybe
the largest part, of how he will define success in his second term... Kash
Patel, the FBI director, sent out a cryptic tweet at 7:03 Friday morning that
“NO ONE is above the law . . . @FBI agents on mission.” He didn’t specify to
whom he was referring, but the timing is unlikely to have been coincidental.
It’s hard to see the raid as anything other than vindictive. Mr. Bolton fell
out of Mr. Trump’s favor in the first term and then wrote a book about his
experience in the White House while Mr. Trump was still President... The real
offender here is a President who seems to think he can use the powers of his
office to run vendettas. We said this was one of the risks of a second Trump
term, and it’s turning out to be worse than we imagined.” The Editorial Board,
WSJ. Commentary at...
https://www.wsj.com/opinion/john-bolton-fbi-kash-patel-donald-trump-f44e7756?mod=opinion_lead_pos2
My cmt: The Wall Street Journal is a conservative
newspaper. When the conservatives turn on Trump (and I’m one of them), it’s
really bad.
.
THE IVY LEAGUE IS FAILING BASIC INVESTING (WSJ)
“Why does the smart money keep flunking Investing 101?
During the 2008-09 global financial crisis, many of the world’s biggest
investors [University endowment funds] found themselves in dire need of cash
because they had sunk too much money into assets that couldn’t be publicly
traded... On average, in fiscal 2024, educational endowments with more than $5
billion in assets held only 2% in cash, 6% in bonds, 8% in U.S. stocks and 16%
in international stocks, according to the National Association of College and
University Business Officers. That left two-thirds of their total holdings in
private funds and other non-traditional assets that can’t readily be turned
into cash... “They’re not as smart as they look,” Siegel [Laurence Siegel, 2007
research director for the Ford Foundation’s endowment] said, “because they’re
human, and humans are quite closely related by evolution to monkeys.” Don’t be
a monkey. Don’t put a penny into alternatives that you can’t afford to have
locked up when you suddenly need cash.” Jason Zweig. Commentary at...
https://www.wsj.com/finance/investing/the-ivy-league-keeps-failing-this-basic-investing-test-747c8b8c?gaa_at=eafs&gaa_n=ASWzDAgWSiGbE3C-nBRlt3Kr1uPeanrfbuioZpzhbBklWEbqk-Qe2PLl8qYIjRX-prI%3D&gaa_ts=68ab75dc&gaa_sig=AveeE8ORIske6Ez9fm_wh7-hMmkbDX9o442cpf6LkNSlQScVvWMam_0KIaAJGPHUrsVgQIlIAUZ4T9lbwZxI_A%3D%3D
NATIONAL ACTIVITY INDEX (Seeking Alpha)
“July Chicago Fed National Activity Index
("CFNAI"): -0.19 vs. -0.18 in June (revised from -0.10),
reflecting deteriorating production and sales, orders, and inventories
indicators that weren't quite as bad as the prior month, the Federal Reserve
Bank of Chicago said on Monday.” Story at...
https://seekingalpha.com/news/4488695-chicago-fed-national-activity-index-ticks-down-in-july
NEW HOME SALES (Realtor.com)
“Sales of newly built homes dropped in July, as price
cuts and homebuilder incentives failed to lure buyers
struggling with affordability. Signed contracts for new single-family homes
were at a seasonally adjusted annual rate of 652,000 last month, down 8.2% from
a year earlier, the U.S. Census Bureau and Department of Housing and Urban
Development reported on Tuesday.” Story at...
https://www.realtor.com/news/real-estate-news/new-home-sales-census-report-july-2025/
DALLAS FED MANUFACTURING (Dallas FED)
“Texas factory activity continued to expand in August,
according to business executives responding to the Texas Manufacturing Outlook
Survey... Price and wage pressures picked up slightly. The raw materials prices
index edged up to 43.7, well above its average reading of 27.4. The finished
goods prices index moved up four points to 15.1, also an elevated reading. The
wages and benefits index remained lower than average but inched up to 15.4.”
Press release at...
https://www.dallasfed.org/research/surveys/tmos/2025/2508
MARKET REPORT / ANALYSIS
-Monday the S&P 500 declined about 0.4% to 6439.
-VIX rose about 4% to 14.79.
-The yield on the 10-year Treasury rose to 4.277%
(compared to about this time prior market day).
MY TRADING POSITIONS:
None
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators
I track, 7 gave Bear-signs and 15 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 declined
from +11 to +8 (11 more Bull indicators than Bear indicators) and is now giving
a Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of
the spread is solidly rising – a bullish sign.
We didn’t get follow-thru buying today after Friday’s big
move higher. That’s not too surprising
since some profit taking would be normal. If the buying had continued it would
have been bullish sign.
I think markets go higher from here and indicators are
suggesting it. I mentioned the big, bear-warning we got last week, and I’ll
repeat it here:
All of the ETFs that I track and chart for momentum
purposes are above their respective 120-dMAs.
This indicator almost always correctly identifies tops and bottoms,
although the timing can be early. The
most recent signals were: It called a bottom the day before the bottom of the
19% correction in April of 2025 when 100% of the ETFs were below their
120-dMAs. It was 2-weeks early when it warned at the top before a small 3%
decline in Oct 2024. It warned the day before the top of a 9% correction in
August 2024.
The declines associated with this indicator are sometimes
small, so I won’t get too worked up over it yet.
Sentiment is elevated too. I measure Sentiment as a 5-day
average of %-Bulls (Bulls/{bulls+bears}) based on the amounts invested in selected
Rydex/Guggenheim mutual funds. Sentiment is now 97%-bulls. This is very high, but not yet giving a sell-signal. Sentiment is not a great timing tool, but it
set’s the stage for declines when (and if) it reaches the sell level.
I was too busy to do anything today, but upping stock
holdings seems advisable for me. I don’t
want to be below 50% invested in stocks unless indicators are worse than where
they are now.
BOTTOM LINE
I’m cautiously bullish. I’ll probably add some stocks Tuesday
to get back to my “fully” invested position of 50% in stocks.
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 improved to 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 40% 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.
“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.
US TAKES 10% STAKE IN INTEL (NBC)
“The Trump administration said Friday that it had taken a
10% [valued at roughly $10-billion] stake in Intel, President Donald Trump’s
latest extraordinary move to exert federal government control over private
business.” Story at...
https://www.nbcnews.com/business/business-news/intel-agrees-us-stake-in-company-how-much-what-to-know-rcna226667
My cmt: It appears that the Government had already given $10-billion
to Intel in Chips Act and other funds from the Biden Administration. There was
no new money, but Intel has agreed to grant the Government a 10% stake,
although the funds had already been committed before the announcement. It is
not clear where the shares come from. Will
new shares be issued? If so, it would be dilutive to shareholders.
TRUMP TO FIRE FED GOVERNOR LISA COOK (CNBC)
“President Donald Trump said Friday he
will fire Federal Reserve Governor Lisa
Cook if she does not resign from
her position...Federal Housing Finance Agency Director Bill Pulte this week
publicly accused Cook of mortgage fraud related to claims that she took two
different properties as her primary residence at the same time.”
https://www.cnbc.com/2025/08/22/trump-fire-fed-lisa-cook-powell.html
My cmt: How ironic. Trump ignores due process while he
rails against “lawfare” against him by the Democrats.
JACKSON HOLE SPEECH EXCERPT (from CNBC)
“...Putting the pieces together, what are the
implications for monetary policy? In the near term, risks to inflation are
tilted to the upside, and risks to employment to the downside—a challenging
situation. When our goals are in tension like this, our framework calls for us
to balance both sides of our dual mandate. Our policy rate is now 100 basis
points closer to neutral than it was a year ago, and the stability of the
unemployment rate and other labor market measures allows us to proceed
carefully as we consider changes to our policy stance. Nonetheless, with policy
in restrictive territory, the baseline outlook and the shifting balance
of risks may warrant adjusting our policy stance.” – Jay Powell,
Chairman of the Federal Reserve.
JACKSON HOLE SPEECH (CNBC)
“Federal Reserve Chair Jerome Powell on Friday gave a
tepid indication of possible interest rate cuts ahead as he noted a high level
of uncertainty that is making the job difficult for monetary policymakers...”
Story at...
https://www.cnbc.com/2025/08/22/powell-indicates-conditions-may-warrant-interest-rate-cuts-as-fed-proceeds-carefully.html
WARNING SHOTS BEFORE A MEANINGFUL PULLBACK (MarketWatch)
“Chris Watling, the CEO, global economist and chief
market strategist at Longview Economics, is wary about the signals U.S.
equities are giving going into the traditionally dodgy September period...
Next, he says signs of froth have continued to build in recent weeks. For
example, the percentage of stocks with valuations greater than 10 times
enterprise value to sales is over 20%, similar to peaks in 2000 and 2021..
given all the flashing signals noted, he remains what he calls “tactically
neutral” on U.S. stocks.” Story at...
Take
heed of the latest market wobble. ‘You get warning shots before meaningful
pullbacks,’ says this strategist.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 1.5% to 6465.
-VIX fell about 14% to 14.22.
-The yield on the 10-year Treasury declined to 4.256%
(compared to about this time prior market day).
MY TRADING POSITIONS:
None
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators
I track, 6 gave Bear-signs and 18 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.)
TO
daily, bull-bear spread of 50-indicators jumped from -8
to +12 (12 more Bull indicators than Bear indicators) and is now giving a Bullish
indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the
spread is solidly rising – a bullish sign. The 10-day did not turn bearish
recently so it was the better signal.
While Powell’s comments were a [per CNBC] “tepid
indication of possible interest rate cuts,” it was enough for the market. I was
wrong on this one even though another Fed Governor came out more or less
against rate cuts given the current data:
“Cleveland Federal Reserve President Beth Hammack said
Friday she would be hesitant about lowering interest rates as long as inflation
remains a threat. In a CNBC interview, the policymaker did not share the
market’s enthusiasm for a cut, sparked after Chair Jerome
Powell’s keynote speech earlier in the morning...” from CNBC at...
https://www.cnbc.com/2025/08/22/cleveland-feds-hammack-casts-doubt-on-interest-rate-cuts-amid-inflation-worries.html
Curious that Fed Governors are not in line with the Fed
Chair.
Friday was a 90% up-volume day. Slightly more than 90% of
all volume on the NYSE was up-volume. While we always like to see a 90%
up-volume day, one 90% up-volume day by itself is not evidence of a sustained
upside reversal. However, there were plenty of other bullish signs.
Two important ones:
-The S&P 500 bounced off its lower trend line,
although the lower trendline is higher than “normal”. Usually, the lower
trendline coincides with the 50-dMA.
-Clearly, there was a big, jump higher in indicators and
that’s a solidly bullish sign.
But not all the news was good today.
Today, Friday, was a statistically significant up-day.
That just means that the price-volume move exceeded my statistical parameters.
Statistics show that a statistically-significant, up-day is followed by a
down-day about 60% of the time. Tops almost always occur on
Statistically-significant, up-days, but not all statistically-significant,
up-days occur at tops. There was also one very reliable indicator warning of a
top.
As of Thursday, all of the ETFs that I track and chart
for momentum purposes are above their respective 120-dMAs. This indicator almost always correctly identifies
tops and bottoms, although the timing can be early. The most recent signals were: It called a
bottom the day before the bottom of the 19% correction in April of 2025 when
100% of the ETFs were below their 120-dMAs. It was 2-weeks early when it warned
at the top before a small 3% decline in Oct 2024. It warned the day before the
top of a 9% correction in August 2024.
The market was bullish today, but we’ll need to be careful
that we don’t get sucked into making huge buys at a top.
Should we buy Monday? It would seem so. Let’s see if we
get follow-thru buying on Monday.
BOTTOM LINE
I’m cautiously bullish. I’ll probably add some stocks
Monday to get back to my “fully” invested position of 50% in stocks.
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 improved to 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 40% 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.
“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.
SCHMID: NO URGENCY TO CUT RATES (Reuters via msn)
“Kansas City Fed president Jeffrey Schmid said on
Thursday there seems no rush to cut interest rates, with inflation still above
the central bank's 2% target and the labor market still in solid shape. ‘I
think we're in a really good spot and I think we really have to have very
definitive data to be moving that policy right now,’ said Schmid, a voter on
interest rate policy this year, said in a CNBC interview.” Story at...
https://drive.google.com/drive/folders/1gYDFlo6uiEHvOeGvrIR6veB5-MZXKch8
My cmt: Looks like those expecting Powell to “pre-announce”
a rate cut in September are going to be disappointed. Schmid just pre-announced
from Jackson Hole that Powell won’t pre-announce from Jackson Hole tomorrow. Schmid isn’t the only one...
NO CASE FOR RATE CUT (Yahoo Finance)
“Cleveland Fed president Beth Hammack said Thursday that
the case for cutting interest rates in September would be a hard one to make
given recent economic data. ‘There's a lot of data we're going to get between
now and September and I walk into every meeting with an open mind about what
the right thing to do is, but with the data I have right now and with the
information I have, if the meeting was tomorrow, I would not see a case for
reducing interest rates,’ Hammack told Yahoo Finance at the Jackson Hole
Economic Symposium.” Story at...
Cleveland
Fed President says 'would not see a case' for September rate cut given latest
economic data
PHILLY FED INDEX (RTT News)
“Manufacturing activity in the Philadelphia area has
weakened in the month of August, the Federal Reserve Bank of Philadelphia
revealed in a report released on Thursday. The much bigger than expected
decrease by the headline index partly reflected a downturn by new orders, as
the new orders plummeted to a negative 1.9 in August from a positive 18.4 in
July.” Story at...
https://www.rttnews.com/3568157/philly-fed-index-unexpectedly-returns-to-negative-territory-in-august.aspx#
JOBLESS CLAIMS (WSJ)
“In the week through Aug. 16, new jobless-claims filings
rose to 235,000, up from 224,000 a week earlier. Economists polled by The Wall
Street Journal were forecasting 225,000 claims. Continuing claims, an indicator
of the size of the total unemployed population, came in at 1.97 million in the
week through Aug. 9... The figure sets a new high since November 2021, evidence
that sluggish hiring is frustrating job searchers.” Story at...
https://www.wsj.com/economy/jobs/u-s-jobless-claims-rose-last-week-25b93181?gaa_at=eafs&gaa_n=ASWzDAjGUIIOIjHsUdaVNlVSuJJFTLmHRyg6EH6NWrWHKIhjMDum_rGd_UI9NzkebBs%3D&gaa_ts=68a77b22&gaa_sig=pMmYQaAQ3mNVsNu7mW-4T3HMEG21-T3rkp4SvoZ9TWta8KxCi47H9A01w9XlKf5OuRmnNkYrM_m2euxOOqYozw%3D%3D
EXISTING HOME SALES (Yahoo Finance)
“Existing home sales increased in July by 2% and were up
0.8% year over year.” Video at...
https://finance.yahoo.com/video/existing-home-sales-july-upswing-161715131.html
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 declined about 0.4% to 6370.
-VIX rose about 6% to 16.60.
-The yield on the 10-year Treasury rose to 4.326%
(compared to about this time prior market day).
MY TRADING POSITIONS:
None
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators
I track, 14 gave Bear-signs and 6 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 declined
from zero to -8 (8 more Bear indicators than Bull indicators) and is now giving
a Bearish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of
the spread is still rising – a bullish sign, but just barely. The rate of
increase has fallen precipitously.
Indicators have been falling and now they are in bearish
territory.
I previously suggested that the index could fall to the 50-dMA.
Thursday, the S&P 500 closed 1.8% above its 50-dMA. We’ll have to see if
the 50-day holds when the Index get’s there. The Index is 7.2% above its
200-dMA. I doubt that the S&P 500 will decline below its 200-day.
BOTTOM LINE
I have to be bearish now, but I don’t see signs that a
big crash is coming.
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 declined, but 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 40% 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.
“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.
FED MINUTES (CNBC)
“Federal Reserve officials worried at their July meeting
about the state of the labor market and inflation, though most agreed that it
was too soon to lower interest rates, minutes released Wednesday showed. The
meeting summary depicted a divergence of opinion among the central bankers,
whose vote to hold their key rate steady came despite objections from two Fed
governors who argued in favor of cutting.” Story at...
https://www.cnbc.com/2025/08/20/fed-minutes-august-2025.html
My cmt: There is still a greater than 82% probability of
a rate cut in September as implied by 30-Day Fed Funds futures prices. Doesn’t
seem right to me.
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 6 million barrels from the
previous week. At 420.7 million barrels, U.S. crude oil inventories are about
6% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
POWELL MAY DISSAPOINT WALL STREET (Fortune)
“Wall Street overwhelmingly expects the Federal
Reserve to cut rates next month, and Chairman Jerome Powell’s speech on Friday
will give him a chance to hint at which direction policymakers are headed. But
some analysts don’t think a September rate cut is in the bag, and even some who
do expect a cut are doubtful that Powell will tease it at Jackson Hole.” Story
at...
https://fortune.com/2025/08/17/jerome-powell-jackson-hole-speech-preview-fed-rate-cuts-tariffs-inflation-jobs/
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 declined about 0.2% to 6396.
-VIX rose about 0.8% to 15.69.
-The yield on the 10-year Treasury declined to 4.291%
(compared to about this time prior market day).
MY TRADING POSITIONS:
None
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators
I track, 10 gave Bear-signs and 10 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 declined
from +9 to zero (Equal numbers of Bull indicators and Bear indicators) and is
now giving a neutral indication. I consider +5 to -5 the neutral zone. The
10-dMA curve of the spread is still rising – a bullish sign.
The S&P 500 fell hard in the morning, tried to regain
the losses, but failed late in the day. It seems to be a sign of the continuing
investor confusion. Unchanged volume was again extremely high, a sign of
confusion that some believe precedes a change in market direction. I’ve never
included this in my indicators since it is wrong much more than right.
Overall, indicators continue to drift lower. Breadth (measured by % of issues advancing on
the NYSE) still looks OK, so we may just see a decline to the lower trendline. The
50-dMA is often around the lower trendline.
The S&P 500 is now about 2.3% above the 50-day, and that is a level
of support.
The real question is Fed Chairman Powell’s upcoming
Jackson Hole speech. That will be Friday
and the “cyber-talk” on financial sites seems to suggest that Powell won’t “pre-announce”
they will lower the Fed rates at the September meeting. I haven’t seen much
evidence that he would signal an upcoming rate-cut. Instead, he is likely to caution
about inflation and suggest the Fed will watch the economic data and act
appropriately. So what’s new?
The consensus CNBC view seems to think that if Powell
doesn’t signal a rate cut in September, we could see further declines in the market.
I don’t know; the consensus is usually wrong when it comes to market direction.
With indicators in neutral territory, I think the market
goes down, but my guess is that the 50-dMA will hold. That’s just a guess; indicators
are declining, but still in neutral territory.
BOTTOM LINE
I’m neutral. My concern: Indicators have been trending
down.
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
WEDNESDAY 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 40% 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.
Photo of Buxton NC at Cape
Hatteras during the passage of Super Storm Sandy in 2017. This beach faces east
and the tops of the waves are being blown off suggesting a southwest wind,
i.e., the center of circulation has already passed.
HWY 12 north of Rodanthe,
NC on Hatteras Island during Sandy. Sandy did not make landfall on Hatteras
Island, but this demonstrates why Hatteras is being evacuated for hurricane
Erin even though Erin is not expected to make landfall.
“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.
THE NATIONALIZATION OF INTEL (WSJ-Excerpt)
“The Trump Administration is reportedly negotiating to
take a 10% stake in Intel Corp., in what would amount to a de facto
nationalization of the storied but struggling semiconductor firm. Does
President Trump really believe that the same government that has so mismanaged
air-traffic control can turn around the chip-making giant?... Intel ran a $18.8
billion loss last year and $3.8 billion during the first six months of this
year. Such losses aren’t financially sustainable. The company cut 15,000 jobs
last year and plans to slash more than 20,000 this year. The chip-maker has also
been spinning off businesses, though the Biden team restricted its ability to
sell off its foundries. Enter the Trump Administration, which may further
expand the government’s role in managing Intel... This is corporate statism,
and rarely does it end well. Political control hamstrings innovation and
investment as managers look to their government overlords for approval.” The
Editorial Board, WSJ. Commentary at...
https://www.wsj.com/opinion/the-nationalization-of-intel-a59fb635?gaa_at=eafs&gaa_n=ASWzDAiZHSMFXi0Nyxq6nAcjh1e1HTry7PpnJmnkTnl7csQh5AwIF_uXdLPmknCBDGk%3D&gaa_ts=68a4a903&gaa_sig=ROKBg66djxVVRUKVGVRrHq5mm4cCL8P4Nl1r6xSah7IQmZa0KuwiK-5mYYYKBZ8AMkx38RYlsNYNgXV1FZc8PQ%3D%3D
TRADERS BUYING DISASTER PROTECTION (Gelonghui finance)
“According to Bloomberg, options traders are increasingly
concerned about a potential crash in technology stocks over the coming weeks,
prompting many to purchase "insurance" against such an event... From
the upcoming Federal Reserve's Jackson Hole Symposium to NVIDIA's earnings
report set for next week, these are all potential catalysts for a market
downturn.” Story at...
https://news.futunn.com/en/post/60809668/traders-are-buying-disaster-put-options-to-guard-against-the?level=1&data_ticket=1755620210109305
HOUSING STARTS / PERMITS (Yahoo Finance)
“Groundbreaking for new U.S. single-family homes and
permits for future construction ticked higher in July... Single-family
housing starts, which account for the bulk of homebuilding, increased 2.8%...”
Story at
https://finance.yahoo.com/news/us-single-family-starts-permits-124444445.html
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 declined about 0.6% to 6411.
-VIX rose about 4% to 15.54.
-The yield on the 10-year Treasury declined to 4.310% (compared
to about this time prior market day).
MY TRADING POSITIONS:
None
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators
I track, 6 gave Bear-signs and 15 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 declined
from +11 to +9 (9 more Bull indicators than Bear indicators). I consider +5 to
-5 the neutral zone. The 10-dMA curve of the spread is rising too – a bullish
sign.
Breadth is bullish, but indicators continue to drift lower. Breadth (measured by % of issues advancing on
the NYSE) still looks OK, so we may just see a decline to the lower trendline. But
as we noted yesterday...
We may not see much movement until investors get a better
handle on the Fed rate cuts. The next Fed meeting is 16-17 September. Perhaps we’ll get some economic news that
will give better clues regarding the rate cut.
For now investors can’t seem to decide even though (as implied by 30-Day
Fed Funds futures prices) the CME Fed Watch tool gives an 85% chance of a 25
basis-point cut (up slightly from yesterday) and a 15% chance of a 50
basis-point cut (down slightly from yesterday).
BOTTOM LINE
I’m cautiously bullish, although my actions suggest I am
neutral to bearish. My concern: Indicators have been trending down.
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 40% 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.
“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.
DEPORTATIONS TO CAUSE INFLATION (Fortune)
“...if Trump continues deporting immigrants at the
current rate, inflation will go from 2.5% to somewhere close to 4% “by the time
it hits its peak early next year.” Zandi [Mark Zandi, Moody’s chief economist] says
his stark prediction is based on recent inflation data. “Foreign-born labor
force is declining, and the overall labor force has gone flat since the
beginning of the year,” he added. “That’s causing tightening in a lot of
markets, adding to costs and inflation.” Story at...
Trump
is deporting so many immigrants that it could cause inflation to hit 4% next
year, top economist says
My cmt: One of our parishioners is a longtime illegal
immigrant. His daughter is here on a medical visa being treated for near
blindness. Treatments are only available in the US. He was working for a local
hotel, but he was arrested by ICE. He had a deportation hearing recently and
the ICE presence was huge at the trial.
It makes no sense to me to deport people who are contributing to the
economy. Give them a green card instead
and make them apply for legal status later. If Zandi is right, Trump’s policies
are going to be a disaster for the country. Where do you think the stock market
goes if inflation hits 4%?
INTEREST RATES - NOTE OF UNEASE (CNBC)
“Federal Reserve President Austan Goolsbee said Friday a
mixed bag of inflation data this week coupled with lingering uncertainty over
tariffs have given him some hesitation about lowering interest rates. Previously,
Goolsbee has spoken of a “golden path” that would combine moderating inflation
and a stable labor market and lead to lower rates. But in a CNBC interview
Goolsbee said he still wants to see some more convincing data before the
Federal Open Market Committee meets on Sept. 16-17. Goolsbee is one of 12 FOMC
voters this year.” Story at...
https://www.cnbc.com/2025/08/15/goolsbee-sees-note-of-unease-as-fed-looks-to-next-interest-rate-move.html
MARKET NEARS A PE OF 30 (Fortune)
“Something doesn’t make sense about the current stock
market boom. U.S. big caps keep soaring while the economic outlook keeps
getting worse. Right now, the atmospherics, Big Momentum and AI euphoria, are
winning over the negative news flow and daunting market metrics. But sooner or
later the fundamentals will take charge, and then, watch out for flying
glass...the S&P price-to-earnings multiple just hit 29.85 (6,469 divided by
$216.69)—I’ll round it to 30. By historical standards, it’s a gigantic, even
scary figure...You never know when gravity will
take hold, only that it always does.” Story at...
How
investors should be thinking as the stock market nears a P/E ratio of 30—a
number that spelled disaster before the dotcom crash
NEXT MOVE MAY BE DOWN (MarketWatch)
“...the Goldman team is wary, noting that compared with
previous periods of low volatility there is a “less friendly” asymmetry to the
stock market. “The risk of a large rally is comparably low, as is common in low
vol regimes because the largest rallies tend to occur during recoveries, but
the equity drawdown probability is elevated and has increased recently,” they
say. They point out the S&P 500 has been boosted by valuation expansion,
while credit spreads have tightened markedly, suggesting investors may not be
adequately pricing in the risk of the economic damage — slower growth and
higher inflation — caused by increased tariffs.” Story at...
Goldman
researchers warn of an unfriendly asymmetry: Why the next big market move may
be down.
SP500 OVERVALUED VS M2 MONEY SUPPLY (McClellan Financial
Publications)
“M2 has grown over time, which is natural as GDP
grows. Sometimes the Fed and the Treasury department screw it up, though,
creating too much or too little money. They did that in a big way,
printing a bunch of extra money in 2020 in response to Covid...The Fed has tried to push the toothpaste back into the
tube, and raw M2 saw a 5.7% drawdown as of its low point in October 2023.
That was the biggest raw decrease in the history of M2, which dates back in
official statistics to 1959...now we are seeing a fairly
extreme reading for the ratio of the SP500 to M2...It rivals the peak we saw in
August 2000, at the peak of the SP500 tied to the Internet Bubble....
... And that is not to say that the ratio
absolutely has to come down this time, just because it has always done so
before...If the amount of money is not enough to keep prices aloft, then like
the dwindling number of chairs in a musical chairs game, it can set off a
response by investors who seek to find enough money to keep playing, or to
cover their positions when compelled by margin clerks to do so.” – Tom
McClellan. Commentary at...
https://www.mcoscillator.com/learning_center/weekly_chart/sp500_now_really_overvalued_versus_m2/
NAHB INDEX (NAHB)
“In further signs of a soft housing market, the latest
HMI survey also revealed that 37% of builders reported cutting prices in August
down from 38% in July. This share has remained at 37% or 38% for the past three
months. Meanwhile, the average price reduction was 5% in August, the same as
it’s been every month since last November. The use of sales incentives was 66%
in August, up from 62% in July and the highest percentage in the post-Covid
period.” Press release at...
https://www.nahb.org/news-and-economics/housing-economics/indices/housing-market-index
MARKET REPORT / ANALYSIS
-Monday the S&P 500 declined about a point to 6449.
-VIX declined about 0.1% to 14.99.
-The yield on the 10-year Treasury rose to 4.335% (compared
to about this time prior market day).
MY TRADING POSITIONS:
None
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators
I track, 5 gave Bear-signs and 16 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 declined
from +16 to +11 (11 more Bull indicators than Bear indicators). I consider +5
to -5 the neutral zone. The 10-dMA curve of the spread is rising too – a
bullish sign.
Friday there was massive unchanged-volume and today we
again saw higher than normal unchanged-volume. I don’t know if this is a
turning point, but it does show significant investor confusion.
Indicators have been falling. Even though indicators
remain bullish, the declining bull-bear spread is a reasonable warning of
potential trouble. With a lot of bull
indicators, we can’t declare a significant correction is coming, but it is a
concern.
Another concern is the new-high data at the all-time high
last Thursday. There weren’t many new, 52-week-highs
on the NYSE at the all-time high. The day before, Wednesday, there had also
been an all-time high and the new-high data was very good, so it’s hard to
assess what this indicator is telling us. This is just one indicator, but it is
important because it has been a decent predictor for how deep a correction may
be. Now, the mixed signals aren’t giving us a clear answer.
We may not see much movement until investors get a better
handle on the Fed rate cuts. The next Fed meeting is 16-17 September. Perhaps we’ll get some economic news that
will give better clues regarding the rate cut.
For now investors can’t seem to decide even though (as implied by 30-Day
Fed Funds futures prices) the CME Fed Watch tool gives an 84% chance of a 25
basis-point cut and a 16% chance of a 50 basis-point cut.
Repeating: I‘m still dragging my feet regarding buying
more stocks. I won’t go all-in, since I suspect we’ll get a better buying point
before the new-year, but on the other hand, that’s what I think. We need to
trade what we see and the indicators are suggesting the markets go higher.
BOTTOM LINE
I’m cautiously bullish, although my actions suggest I am neutral.
My concern: Indicators have been trending down.
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 declined to
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 40% 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.
My basket of Market Internals improved to BUY. (My basket
of Market Internals is a decent trend-following analysis that is most useful
when it diverges from the Index.) 
