Recession? ... Durable Goods ... Factory Orders ... GDP ... 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.
 
RECESSION?
“The economy is on the precipice of recession. That’s the clear takeaway from last week’s economic data dump...Consumer spending has flatlined, construction and manufacturing are contracting, and employment is set to fall. And with inflation on the rise, it is tough for the Fed to come to the rescue...It’s no mystery why the economy is struggling; blame increasing U.S. tariffs and highly restrictive immigration policy...The tariffs are cutting increasingly deeply into the profits of American companies and the purchasing power of American households. Fewer immigrant workers means a smaller economy...” - Mark Zandi, Chief Economist, Moody’s Analytics.
 
RECESSION WARNING?
“We have consistently emphasized that a slide in labor demand of this magnitude [as was seen Friday] is a recession warning signal. Firms normally maintain hiring gains through growth downshifts they perceive as transitory. In episodes when labor demand slides with a growth downshift, it is often a precursor to retrenchment.” - JPMorgan
 
THE WEIRDEST GDP REPORT – EXCERPT (WSJ)
“The economy grew 3% on an annual basis, but largely because imports collapsed... The crazy swing in imports shows how much Mr. Trump’s up-and-down trade policies have disrupted business decisions and left companies scrambling to adapt. This seems to have had a negative effect on private domestic investment, which fell 15.6% in the second quarter after a surge in the first...The doughty U.S. consumer was less affected, contributing 0.98% to GDP—decent if hardly bullish. But it’s notable that final sales to private domestic purchasers, a key measure of demand, rose only 1.2%. That’s the lowest since the fourth quarter of 2022...There’s no recession signal in the second-quarter numbers, but there’s no boom either.” – The Editorial Board, WSJ
https://www.wsj.com/opinion/gdp-report-economy-consumers-donald-trump-tariffs-d9879d98?gaa_at=eafs&gaa_n=ASWzDAhaO0grLVwnday7d4-UjffhPDBudVRlXK3ZaVl9EfZq5F7z4rISLy-DfT2p2tE%3D&gaa_ts=688e696f&gaa_sig=BGgJCVeQde9jgWGp1Nrr05tF3Z-RI6rVg1yZr1gWsvQ9VOnIONdfulbY3jfI3cY7rxQSKuiR2oNbxMlHzD7ZTA%3D%3D
 
DURABLE GOODS (Advisor Perspectives)
“New orders for manufactured durable goods fell 9.3% to $311.85 in June, the largest monthly decline since 2020. The latest reading was just above the projected 10.4% monthly decline. Compared to a year ago, new orders are up 10.9%.” Commentary at...
https://www.advisorperspectives.com/dshort/updates/2025/07/25/durable-goods-orders-down-9-3-in-june-less-than-expected
 
FACTORY ORDERS (Census Bureau)
“New orders for manufactured goods in June, down two of the last three months, decreased $30.9 billion or 4.8 percent to $611.7 billion, the U.S. Census Bureau reported today.” Report at... 
https://www.census.gov/manufacturing/m3/current/index.html
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 1.5% to 6330.
-VIX declined about 14% to 17.52.
-The yield on the 10-year Treasury declined to 4.198% (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, 15 gave Bear-signs and 7 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 improved, but remained bearish at -8 (8 more Bear indicators than Bull indicators). I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread continued falling – a bearish sign.
 
We had a big down-day Friday so a bounce higher today is not a surprise based on the stats. I thought we might see continued selling today, but it’s just another case of trade what you see, not what you think.
 
Today, Monday, 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. That suggests that today’s action doesn’t mean much.
 
We still see negative indicators, but as we know, no indicator system is always right. Could we be wrong this time? Of course, but given that indicators are still falling, I’m ok with my current conservative, defensive position. 
 
I won’t change my invested position unless indicators reverse higher.
 
Indicators suggested a correction greater than 10% when the S&P 500 made its all-time high a week ago. Unless there is a recession, a correction of 20% or more is not likely. 
 
If we do see a correction, and of course there is no guarantee we will, some levels of support follow: The S&P 500 was 3.1% above the 50-dMA and 7.2% above the 200-dMA.
 
BOTTOM LINE
Until proven otherwise, I’m bearish.
 
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 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.