“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.
“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
“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
“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/
“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
-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).
None
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.
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.
I’m cautiously bullish. I’ll probably add some stocks Tuesday to get back to my “fully” invested position of 50% in stocks.
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
DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)
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)
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.
