Jobless Claims ... GDP ... Durable Orders ... 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.
 
PERILS OF PASSIVE INVESTING (The Felder Report)
“...stock market valuations have reached some truly rarified air. The Shiller cyclically adjusted price-to-earnings ratio is hovering around 37.5. And, as David Rosenberg points out, Over 35 is, “the only cutoff point where every single time [the forward return] is negative.”
 

Commentary and chart from...
https://thefelderreport.com/2025/09/20/the-perils-presented-by-an-increasing-passive-share-of-the-stock-market/
 
DURABLE ORDERS (RTT News)
“After reporting a sharp pullback by new orders for U.S. manufactured durable goods over the two previous months, the Commerce Department released a report on Thursday unexpectedly showing a significant rebound by durable goods orders in the month of August. The Commerce Department said durable goods orders shot up by 2.9 percent in August...” Story at...
https://www.rttnews.com/amp/3577256/u-s-durable-goods-orders-unexpectedly-rebound-in-august.aspx
 
JOBLESS CLAIMS (CNBC)
“First-time filings for the week ended Sept. 20 totaled a seasonally adjusted 218,000, down 14,000 from the prior week’s upwardly revised figure and significantly less than the Dow Jones consensus estimate for 235,000...” Story at...
https://www.cnbc.com/2025/09/25/jobless-claims-tumble-to-218000-well-below-estimate-despite-fears-of-labor-market-weakness.html
 
GDP / PCE PRICES - FINAL
“Gross domestic product, the broadest measure of economic output, rose at an annualized rate of 3.8% from April through June, the Commerce Department said Thursday in its third and final estimate. That’s significantly higher than the 3.3% rate reported in the second estimate...” Story at...
https://www.cnn.com/2025/09/25/economy/us-gdp-q2-final
 
“Gross Domestic Product (GDP). GDP is simply the total amount of spending in an economy. GDP, as currently measured, does not distinguish between “good” spending and “bad” spending. GDP does not distinguish between consumption spending and investment spending. GDP also does not distinguish whether spending is generated by existing wealth, by going into debt temporarily, or by going into debt permanently. In this world, every dollar spent on education or new means of production, is counted the same as every dollar spent on epic bachelor parties and video games.” – Michael Lebowitz, Real Investment Advice.
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 declined about 0.5% to 6605.
-VIX rose about 3% to 16.74.
-The yield on the 10-year Treasury rose to 4.17% (compared to about this time prior market day).
 
MY TRADING POSITIONS:
SPY – Added 8/26/2025
XLK – Added 8/26/2025
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 16 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 declined from Zero to -9 (9 more Bear indicators than Bull indicators) and reversed to a Bear indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained heading down – a bearish sign.
 
The big drop in the daily indicators and the bearish reversal in the 10-dMA of indicator spread are a worry, but they are not unlike the warnings we saw at the end of August. In those recent cases the S&P 500 declined, but only to the lower trendline. It did not fall to its 50-dMA. That could be the case again.
 
As I wrote previously, there was decent breadth at the all-time high that occurred just three days ago. This suggested that if declines occurred, they would be less than 10%. With that in mind, I am not inclined to make portfolio changes now. I might change my mind if the lower trend line is violated in a meaningful way. If it is, I’ll reassess. Otherwise, we’ll be looking for a bottom as a buying opportunity.
 
The 10-day of issues advancing on the NYSE fell to 45%, i.e., less than half of the issues have been up over the last 10-days.  This is one of my measures for Breadth. It is now a bearish sign.
 
REPEATING:
If the decline continues, how far will it go? The best guess would be that the 50-dMA will hold.  Currently, the 50-dMA is about 6450 or about 2.4% below today’s close. The lower trendline is higher and that is also a level of strong support.
 
BOTTOM LINE
I am cautiously bullish, I don’t expect a big correction, but I’ll be paying attention to indicators, as always.
 
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 to SELL. (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 50% 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.