“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
“President Trump’s tariffs are coursing through the American (and world) economy, even if their macro effects are taking time to show up in the national statistics... The price of a pound of unroasted Brazilian beans has jumped to more than $6 from $4.50 [wholesale], says Dan Hunnewell, the owner of Coffee Bros., a specialty supplier in New York. He’s trying to keep his own prices steady “as long as possible,” he adds. “I will even eat some of the difference.” But if the 50% tariffs on Brazil continue, he expects to raise prices ‘pretty significantly...’” - WSJ Editorial Board. Commentary at...
https://www.wsj.com/opinion/a-tariff-lesson-for-coffee-drinkers-brazil-trade-trump-24e595c7?gaa_at=eafs&gaa_n=ASWzDAjO9wsojqiz2EVHTeRG6kGIcEj0QeQNR-6jyBSTH8mIjmpgWwKg4t4CN2HWAtY%3D&gaa_ts=68cb01b1&gaa_sig=FNwUEn76bXbbRmporRz-SsHtRXD2mD3Pd2LHJmpAMU0Qdr7JHhoB4NR9eXvenrzfuAbpZ4mpj6vZd_WbDNz92A%3D%3D
“Investors have a strange relationship with risk. On the one hand, they want it: Risk brings reward when it works out. On the other hand, unrewarded risk is the very last thing anyone wants...This is relevant to today’s stock market because the market is riskier than it used to be...
... it is much more concentrated in a handful of stocks than in modern times. That means investors who simply track the market are taking much more single-stock risk than in the past...
...The concentration is well-known, but that doesn’t stop it from being scary. Buy the S&P 500, and the top five stocks make up 27.7% of the portfolio, up from 11.7% a decade ago and the same as in 1964...Who wants to diversify when concentration has worked so well?...In the past, lots of people...it’s worth hedging your bets...” - James Mackintosh. Senior Markets Columnist, The Wall Street Journal.
Story at...
https://www.wsj.com/finance/stocks/the-markets-riskier-than-it-used-to-beand-investors-love-it-8eecddc2?gaa_at=eafs&gaa_n=ASWzDAiNDmvIpAMpfGRMzWGG_8bi_S1Vhd9PqDFeX6c7paXjWgu4mKYAlY9Fggr2oeA%3D&gaa_ts=68caf9b3&gaa_sig=is_oLHatBpL-Sv0jeraeQUpd5iWH44ubm1SA07mkMTmiiT9oelJ8i4d2zHiq-8z7lZjKEBmfHFgW3zk1NdIEeA%3D%3D
My cmt: There were several more risk elements mentioned in the article. It’s interesting, because my numbers don’t fully support the premise. At a recent all-time high on the S&P 500, almost 9% of issues on the NYSE made new 52-week highs. That is well above the 5-year average for this stat and it suggests a healthy participation in the market. So as measured by issues, the markets are not overly concentrated. It’s possible that they are too concentrated based on the size of the leaders, but that’s not a number that I track. I suspect that in the past when markets have been concentrated, the companies that everyone was piling into were large too – think Exxon, Microsoft, etc, - so this concern may be overblown at present. Will it stay that way? We can only guess.
“The Federal Reserve on Wednesday lowered the benchmark overnight lending rate by a quarter percentage point, and expects two more rate cuts could be made by the year’s end. However, the members see the new year bringing just one more quarter-point cut.
https://www.cnbc.com/2025/09/17/fed-meeting-today-live-updates.html
“Single-family homebuilding continues to lag expectations: -7% month over month and -12% year over year...Building Permits, also expected to come in around 1.37 million seasonally adjusted, annualized units for the month, fell as well: to 1.312 million. This is a pretty undeniable softening in the forward-looking housing starts market...” Story at...
https://finance.yahoo.com/news/housing-starts-decreased-august-151300211.html
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 9.3 million barrels from the previous week. At 415.4 million barrels, U.S. crude oil inventories are about 5% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
-Wednesday the S&P 500 declined about 0.1% to 6600.
-VIX declined about 4% to 15.72.
-The yield on the 10-year Treasury rose to 4.087% (compared to about this time prior market day).
SPY – Added 8/26/2025
XLK – Added 8/26/2025
Today, of the 50-Indicators I track, 6 gave Bear-signs and 17 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.)
S&P 500 daily chart shows the usual volatility on the day the Fed announces its rate decision. After all the turmoil, the S&P 500 was little changed.
I am bullish until proven otherwise. We can re-evaluate when the S&P 500 reaches its upper trend line.
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
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
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.
