Navigate the Stock Market: October 2025

Friday, October 24, 2025

CPI ... Michigan Sentiment ... Composite PMI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

NO FEDERAL DISASTER DECLARATION FOR WESTERN MD (Maryland.gov)
“The Federal Emergency Management Agency (FEMA) informed the State of Maryland late last night that the state’s appeal for a Major Disaster Declaration for the May 2025 flooding that occurred in Allegany and Garrett Counties has been officially denied. For the Western Maryland communities who experienced devastating flooding, there are no additional appeals available and there is no legal recourse for the State to seek federal disaster funding. “This outcome is not just deeply frustrating, it also ignores the devastation wrought by historic floods in Appalachia and leaves Marylanders on their own,” said Gov. Moore.” Story at...
https://governor.maryland.gov/news/press/pages/Western-Maryland-Flood-Survivors-Left-Without-Federal-Disaster-Aid-After-Trump-Administration-Denies-Appeal.aspx
My cmt: As a former Emergency Manager in the Federal system, I can understand the basis for Trump’s decision. The Stafford Act established the framework for the federal disaster assistance to the states. It was written such that the federal government would only be involved when the State could not handle a disaster on its own. Over the years that was eroded to the point where even snowstorms were declared disasters, as if the locals couldn’t handle snow removal. The reason the states want a declared disaster is simple – it opens the federal coffers and the Feds pay for 75% of the cost. In the case above, only 2 counties were involved; on the surface, Trump’s decision is following the original intent of the law - not something I say about Trump very often.

“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.

CPI (CBS News)
“The Consumer Price Index climbed at an annual rate of 3% in September, coming in below economists' forecasts as the impact of President Trump's tariffs remain muted.”

Story at...
https://www.cbsnews.com/news/cpi-report-today-inflation-september-2025-tariffs/

S&P GLOBAL US COMPOSITE PMI (S&P Global)
“US business activity growth accelerated in October to the second-fastest so far this year, according to early ‘flash’ PMI data, accompanied by the largest rise in new business seen in 2025 to date. Improvements in output and new work were recorded in manufacturing and services, though both sectors signaled falling exports. Factories also reported falling input buying amid a steep drop in backlogs of work and an unprecedented build-up of unsold stock. Meanwhile, while employment growth picked up, the pace of job creation remained only modest, and weakened especially in manufacturing.” Report at...
https://www.pmi.spglobal.com/Public/Home/PressRelease/eb6ffb6222214cbfbb42d44541c5ebbe

NEW HOME SALES
“Existing-home sales increased by 1.5% month-over-month in September, according to the National Association of REALTORS® Existing-Home Sales Report.” Press release at...
https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-1-5-increase-in-september

MICHIGAN CONSUMER SENTIMENT (Univ of Michigan)
“Consumer sentiment was little changed this month, slipping a scant 1.5 index points from September. A modest increase in sentiment among younger consumers was offset by decreases among middle-age and older consumers. Current personal finances inched up, while expected personal finances receded. Overall, consumers perceive few material changes in economic circumstances from last month; inflation and high prices remain at the forefront of consumers’ minds. There was little evidence this month that consumers connect the federal government shutdown to the economy.... Year-ahead inflation expectations ebbed from 4.7% last month to 4.6% this month.” Report at...
https://www.sca.isr.umich.edu/

MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.8% to 6792.
-VIX declined about 5% to 16.37.
-The yield on the 10-year Treasury was little changed at 4.003% (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, 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
Today’s annual inflation number was 3% vs. the 2.9% from last month. It hardly seems like a celebration was in order, but since Wall Street expected 3.1% it is hailed as wonderful news and markets shot higher.

We can use the rule of 72 to find the impact of inflation lingering at 3% annually. Prices will double every 24 years (72 divided by 3). At the Fed’s target of 2%, prices will double every 36 years. That’s high and it mostly explains why replacing my Tahoe is going to cost $75,000 vs. a car I bought for $34,500 20-years ago.

There was some good news: core inflation excluding food and energy dropped from 3.1% annually to 3%. That’s still well above the Fed target, but it’s ok, because who needs food and energy? The Fed is still expected to cut rates next week. According to Fed Watch at the CME Group, there is a 97% chance of a quarter point rate reduction.

The daily, bull-bear spread of 50-indicators declined from +10 to +9 (9 more Bull indicators than Bear indicators), still a strong Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it continued higher, a Bullish sign.

On Friday there was a new all-time high for the S&P 500. At all-time highs, I always check breadth on the NYSE. When we look at New, 52-week highs, we see that around 5.1% of issues on the NYSE made new 52-week highs today. That number is below the 5-year average of about 7%. That’s a concern, but it does not trigger a warning, i.e., new-highs’ are ok, but I’d like to see them higher.

The S&P 500 is 11.6% greater than its 200-dMA. The 10-15% zone is where we often see weakness in the markets.

BOTTOM LINE
I’m Bullish.

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 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.

Thursday, October 23, 2025

Car Loan Defaults ... Home Sales ... 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.

NATONAL DEBT ACCELERATES (Fortune)
“The U.S. national debt has surged past $38 trillion, according to the U.S. Treasury Department,...Michael A. Peterson, CEO of the nonpartisan watchdog dedicated to fiscal sustainability, said this landmark is “the latest troubling sign that lawmakers are not meeting their basic fiscal duties.” In a statement provided to Fortune, Peterson said that “if it seems like we are adding debt faster than ever, that’s because we are. We passed $37 trillion just two months ago, and the pace we’re on is twice as fast as the rate of growth since 2000.’... “Adding trillion after trillion to the debt and budgeting-by-crisis is no way for a great nation like America to run its finances,” Peterson said. “Lawmakers should take advantage of the many responsible reforms available that would put our nation on a stronger path for the future.’” Story at...
As national debt accelerates to $38 trillion, watchdog warns it’s ‘no way for a great nation like America to run its finances’

CRISIS BIGGER THAN GREAT RECESSION? (Daily Express)
“...experts are sounding the alarm about another impending crisis for the US economy. This crisis pertains to the car lending market and an escalating number of car repossessions in the United States due to Americans defaulting on their car finance payments - a problem affecting millions and setting off warning signals on Wall Street... Carl [Carl Hazeley, CEO of financial information platform Finimize] stated: "Car finance defaults are worth watching closely. Auto loan delinquencies are approaching Great Recession levels, with nearly 5% of loans currently delinquent and subprime delinquencies at 6.43%. "What makes this particularly concerning is the cascade effect. Losing access to a car can mean losing your job, your ability to get your kids to school, or access to healthcare." Story at...
Donald Trump's economy on verge of crisis 'bigger than Great Recession', experts warn

EXISTING HOME SALES (Builder)
“Existing-home sales remained relatively stable in September, increasing by 1.5% month-over-month, and 4.1% year-over-year, according to the National Association of Realtors (NAR). Sales increased on an annual basis in all regions except the West, where sales were flat compared to September 2024.” Story at...
https://www.builderonline.com/data-analysis/existing-home-sales-increase-as-inventory-reaches-five-year-high

KC FED MANUFACTURING (Market Screener)
“Activity at factories in the central U.S. improved further this month, with expectations for future activity jumping as the Federal Reserve mulls lowering borrowing costs further. The Federal Reserve Bank of Kansas City said Thursday that its Tenth District Manufacturing Survey's composite index climbed to 6 this month from 4 in September, marking a fourth straight month of expansion after more than three years in contraction.” Story at...
https://www.marketscreener.com/news/central-u-s-manufacturing-activity-increases-at-faster-pace-kansas-city-fed-ce7d5dd8df88f021

MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.6% to 6738.
-VIX declined about 7% to 17.3.
-The yield on the 10-year Treasury rose to 4.005% (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, 5 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 improved from +5 to +10 (10 more Bull indicators than Bear indicators), a strong Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it continued higher, a Bullish sign.

The S&P 500 is 10.8% greater than its 200-dMA. The 10-15% zone is where we often see weakness in the markets so it is hard to say whether we’ll see much of a fall rally that the pundits are talking about on CNBC. My guess is that we will, but the odds aren’t as good as we’d like.

Tomorrow, Friday, we’ll get the September CPI report at 8:30 am. The expectation is for CPI around 3%. This is the first “big” federal report since the shutdown started. Last month the annual CPI was 2.9%.

There is a term, “Critical Mass,” espoused by Bob Brinker of Money-Talk fame. Critical Mass refers to the amount of funds that are enough to retire comfortably. At that point, there should be an investment philosophy to take less risk. Why risk the critical mass? The recommended portfolio for retirees is usually balanced with 50% in stocks and 50% in Bonds. This allows the portfolio to keep up with inflation while providing income. This portfolio also reduces risk by cutting stock exposure. I agree that less risk is a good idea and I have about 50% in stocks now; but rather than put 50% in Bonds, I am usually around 25% in bonds and 25% in cash. I trade the cash with a goal of earning more than 5%. If I do, I have probably earned more than I would have in Cash or Bonds with less risk. Additionally, I am often able to far exceed the goal. That is a round-about discussion of why I didn’t add to stocks today. I expect a better opportunity later.

BOTTOM LINE
I’m Bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained Neutral. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Indicators Improving

improved to +9 from +5 around mid-day. There are now only in my system. The catch is that the S&P 500 is 10.8% above its 200-dMA. 12% is sell in my system, although I don't act on one signal. That suggests the odds of making a strong gain with new money at this point are not great. Risks don't seem to outpace rewards. Given that concern, I have decided not to add to stock holdings at this point. I remain fully invested and I am Bullish. Bottom line: Why take the added risk? I decided not to.

Wednesday, October 22, 2025

22 States Already in Recession... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis

Report at...
https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/september-2025

22 STATES ALREADY IN RECESSION (Moneywise)
“...in a recent MarketWatch report, Mark Zandi, chief economist at Moody’s Analytics, said 22 of America’s 50 states — including the District of Columbia — are already in a recession, and if certain states start experiencing their own declines in growth, it could tip the entire country into a broad economic slump.” Story at...
Economist Mark Zandi says these 22 states have slipped into recession based on 2 clear indicators — could the ripple effects hit your wallet next?

MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 declined about 0.5% to 6699.
-VIX rose about 4% to 18.6.
-The yield on the 10-year Treasury declined to 3.953% (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, 7 gave Bear-signs and 12 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 +5 (9 more Bull indicators than Bear indicators), a Neutral indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it continued higher, a Bullish sign.

Conditions were worse earlier in the day. Although the indicator spread was still neutral the 10-dMA of spread was headed down. Breadth improved later in the day and several indicators improved as a result.

While the S&P 500 is close to its lower trendline, it is less than 1% from another all-time high.

The S&P 500 is 10.2% greater than its 200-dMA. The 10-15% zone is where we often see weakness in the markets so it is hard to say whether we’ll see much of a fall rally that the pundits are talking about on CNBC. My guess is that we will, but the odds aren’t as good as we’d like.

Wednesday, we note that Unchanged volume is high, a sign of confusion that some believe precedes a change in market direction. Unchanged Volume has been high a lot over the last month. I’ve never included this in my indicators since it is wrong much more than right.

As I noted yesterday, it looks like the market is improving beneath the surface of the major indices. I’ll run the numbers around mid-day Thursday and decide whether to add to stocks.

BOTTOM LINE
I’m Bullish/Neutral.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained Neutral. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Tuesday, October 21, 2025

Shiller CAPE ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“The [above] chart compares the CAPE ["Cyclically Adjusted P/E Ratio"] to a measure of 10-year forward price returns for the SP500 (dividends not included). I have inverted the scaling on that plot of forward returns to better show the strong correlation. And the plot of forward returns ends in 2015 because the market has not yet told us what the 10-year forward returns after then are going to look like... The big peaks in CAPE in 1929 and 2000 led to instances of negative 10-year returns. So did the lesser CAPE peak in 1965...
... This means that the potential for a buy and hold approach working well over the next 10 years is going to be pretty low.” – Tom McClellan. Excerpted from....
https://www.mcoscillator.com/learning_center/weekly_chart/shillers_cape_at_very_high_level/
My cmt: That’s the point of this blog. I won’t be holding during a downturn and the indicators have been very good at identifying tops. We can hope that the trend of correct calls at major tops will continue. Unfortunately, there are no guarantees.

“Harley Schwadron is a cartoonist in Ann Arbor, Michigan. His cartoons have appeared in many major publications, including Barron’s, Harvard Business Review, Punch, Playboy, American Legion, New York Times, and Readers Digest. Many of Harley's cartoons deal with business, politics and financial investing. He has illustrated some 50 books.” From...
Political Cartoons From Harley Schwadron

TIME RUNNING OUT ON HEALTH SUBSIDIES – Excerpt (WSJ)
“The window for extending billions of dollars in Americans’ healthcare subsidies is closing rapidly. Enhanced Affordable Care Act subsidies are set to end after this year unless Congress acts, and open enrollment for insurance next year By Lindsay Wise, Anna Wilde Mathews and Katy Stech Ferek starts next month. Democrats have demanded that Republicans negotiate on extending the subsidies as a condition for ending the government shutdown, now in its third full week.” – WSJ Front Page.
https://www.wsj.com/public/resources/documents/94xXfOHegeoeeh4wpCBm-WSJNewsPaper-10-20-2025.pdf
My cmt: Payments to Health Insurers’ (subsidies) were designed to lower health care premiums during COVID in the Obama Care insurance programs. The subsidies were not intended to be permanent. They expire after 2025. (Not already expired as I recently mentioned.) But Politicians hate to take away any benefit once established. So far Republicans haven’t blinked as the Democrats try to blame Republicans for the shutdown.

LEADING ECONOMIC INDICATORS (Conference Board)
While not a government institution, the Board is not able to publish the LEI due to the lack of Government data.

MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was unchanged at 6735.
-VIX fell about 2% to 17.87.
-The yield on the 10-year Treasury declined to 3.963% (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, 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 improved from -1 to +9 (9 more Bull indicators than Bear indicators), a Bullish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it reversed higher, a Bullish sign.

It looks like the market is improving beneath the surface of the major indices. Absent further Tariff turmoil, I’ll add to stock holdings...slowly. Further, I’ll wait for the S&P 500 to be showing strength i.e., moving higher. Indicators aren’t always a full green light, so I’ll want to see confirmation in price.

The good news is that S&P 500 is at its lower trendline suggesting it as room to run higher.

BOTTOM LINE
I’m Bullish. Seems like it’s been a while since I wrote those words without qualification.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals improved to Neutral. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Monday, October 20, 2025

Trump Fires Prosecutor ... 1929 Again? ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

IS THIS 1929 CRASH AROUND THE CORNER? (MarketWatch)
“...is this rally really reminiscent of 1928? In one way, for sure: The laws of physics create a nervous energy; the higher you rise, the further you fall.
It seems imprudent, even impolite, not to advise caution, rather than mindlessly becoming part of the herd. With that in mind, it seemed apt to check in with Timothy Crack, an economist living in New Zealand, a country with more sheep than people. He describes the market as “another bullet point in the centuries-long list of paroxysmal bubbles in asset prices. We all know that humans have an awful history of chasing stock prices so optimistically that they push them past sensible levels, given fundamentals like earnings and dividends. By historical standards, the S&P 500 has been out of line with historical fundamental ratios for a long time,” Crack told MarketWatch.

“We have slowly gotten to the point where housing prices, gold prices, bitcoin prices, S&P 500 levels and even grocery prices seem to have been inflated to levels that are continually grabbing the headlines,” Crack said. “My secretary and one colleague both asked me yesterday if they should buy physical gold; it will be my hairdresser next. Retail investors have wide access to online trading, commissions have fallen, ETFs keep popping up that allow you to take positions in assets that were previously difficult to access. A friend calls it the ‘everything bubble.’ ” Story at...
‘A friend calls it the everything bubble’: Why do so many economists fear a 1929-style crash?
The date of the crash was 28 October 1929. Markets fell about 50% in 2-weeks.

LEADING ECONOMIC INDICATORS (Conference Board)
Not released today. Maybe Tuesday.

MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 1.1% to 6735.
-VIX fell about 12% to 18.23.
-The yield on the 10-year Treasury declined to 3.982% (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, 11 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 improved from -9 to -1 (1 more Bear indicator than Bull indicator), a Neutral indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained down - a Bearsh sign - but as shown on the chart above, the 10-day average is not falling as fast. Perhaps we’ll see a reversal.

-The latest Outside Reversal Day signal has been canceled – today’s close was higher than the intra-day high on the day of the signal.

-The Hindenburg Omen signal is cancelled since the McClellan Oscillator turned positive.

-49.5% of issues trading on the NYSE have been up over the last 2-weeks, close, but still a bearish sign.

Following the indicators and price action, I’m Neutral. I’ve been fully invested (50% in stocks) during this weakness. As a retiree, I hold about 20% in cash that I invest tactically when I think risk is low – haven’t seen that in a while. That could change; we’ll see

As for a 1929 style crash, I've seen a few - Dot.com crash; 1987 Debacle; Financial/Housing Crash. There is another one coming, but we never really know when it will begin. I am reasonably certain my indicators will get me out before markets fall too far. I don't see a Crash now. Based on PE's, it is not too much of a stretch to think a crash could be only a year or so away.

BOTTOM LINE
Neutral.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained SELL. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Friday, October 17, 2025

Housing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

The real crime in the photo is that Trump is making this pronouncement in front of President Ronald Reagan’s portrait.

“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.

“Our call of the day suggests something under the surface of the market may have shifted after last week’s selloff, with a pullback just getting started. Independent research consultancy Longview Economics’ global economist and chief market strategist Chris Watling told clients on Monday that he’s cautious where stocks are concerned.” Story at...
Friday’s selloff broke something in the stock market. Here’s what that means for investors.

THREE YEARS OF DOUBLE-DIGIT GAINS MIGHT BE BAD NEWS (Motley Fool)
“If current momentum holds through the end of the year, 2025 would mark a third consecutive year of double-digit gains. Such a streak is exceedingly rare. Over the past century, the index has posted back-to-back annual gains of 20% or more in only four distinct eras: the 1920s, 1930s, 1950s, and 1990s. Each of those periods created enormous wealth -- but also painful lessons -- reminding investors that history's verdict on sustained rallies is anything but clear.” Story at...
The Stock Market Has Only Seen 4 Periods Like This in 100 Years -- and History Couldn't Be Less Clear About What Happens Next

HOUSING STARTS (Forbes)
“The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index rose five points in October to 37, its highest level since April and the biggest month-over-month improvement since January 2024. The index, based on a monthly survey of single-family builders, measures confidence in current and expected sales conditions on a scale of 0 to 100. Readings above 50 indicate that more builders see conditions as good than poor, meaning that pessimism, while abating, is still widespread.” Story at...
https://www.forbes.com/sites/brandonkochkodin/2025/10/16/with-government-stats-paused-homebuilder-survey-sends-a-positive-economic-signal/
My cmt: Government data not available.

MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.6% to 6666.
-VIX fell about 15% to 21.55.
-The yield on the 10-year Treasury rose to 4.011% (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 improved from -13 to -9 (9 more Bear indicators than Bull indicators), a Bearish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread smooths daily fluctuations; it remained down – a Bearsh sign.

Only 48% of issues trading on the NYSE have been up over the last 2-weeks, a bearish sign.

The S&P 500 is about 1.6% above its 50-dMA. Six days ago, the S&P came close to its 50-dMA and bounced higher. My guess is that this weakness is still not over and I suspect the Index will fall below the 50-day this time. I think the dip-buyers are running out of steam.

Repeating:
We’ve seen 6 Bearish Outside Reversal Days in the last 6 weeks. The last time that happened was in the 7-weeks prior to the 8.5% correction that bottomed in August of 2024. This signal remains in place until the S&P 500 closes above the high for the day on the Outside Reversal Day.

The Hindenburg Omen signal remains in place until the McClellan Oscillator turns positive.

Now I must be bearish. Indicators remain down as is the 10-dMA of indicator spread. Volumes on the NYSE have been rising suggesting that more investors are becoming concerned.

BOTTOM LINE
SIMILAR TO YESTERDAY: I am Bearish, but I doubt that this will turn into a major correction. Breadth was good at the top. My guess is for about a 7% - 10%decline. I may not be able to call a bottom - small declines give small signals – but we’ll try.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained 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.