ADP Employment ... ISM Manufacturing ... Construction Spending ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 

“But as happens in Wall Street all too often, what the wise do in the beginning, fools do in the end.” – Warren Buffet, 1989 letter to Berkshire Hathaway shareholders.
My cmt: The Buffett Indicator sits at a whoppingly bearsish 213%, topping dot-com bubble levels. For more, see my earlier post BUFFETT INDICATOR IS BRIGHT RED – WORSE THAN 1999 BUBBLE at...
http://navigatethestockmarket.blogspot.com/2025/09/dallas-fed-manufacturing-momentum.html
 
“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.
 
US TAKES A STAKE IN LITHIUM AMERICAS (CNBC)
“Lithium Americas shares rose 35% in extended trading Tuesday after U.S. Energy Secretary Chris Wright told Bloomberg that the U.S. government will take a small stake in the company...[It is] the first such stake proposed for a Canadian company. Lithium Americas trades on both the Toronto Stock Exchange and the NYSE but is incorporated and domiciled in Canada.”
https://www.cnbc.com/2025/09/30/lithium-americas-stock-pops-as-government-takes-a-stake-to-boost-nevada-project.html
My cmt: In my 34+year career in Government, the expenditure process was inviolate. It takes two Bills for the Government to spend money: (1) An Authorization Bill that spells out the specifics of a future expenditure. (2) An Appropriations Bill that sets the amount of money to be expended, typically in a Fiscal Year. Both are approved by Congress and signed into law by the President.
Occasionally, there would be an accidental, illegal, unauthorized expenditure in my office. This might happen if a contractor was directed to perform work before a change order was completed. This resulted in potentially harsh penalties for the employees involved along with a long and drawn-out paper trail of explanations regarding how it happened, why it was unintentional and how it would be avoided in the future.
I write this just to point out that the Trump administration has no authority to spend the money described above.  Congress authorized the United States to buy a portion of Intel via the CHIPS Act. For Lithium Americas, there is no such authorization. Yet Congress doesn’t raise a peep. Why?  The GOP are a bunch of spinless wimps who have ceded their power of the purse to Donald Trump. The Democrats don’t complain because they (Warren, Saunders, Ocasio-Cortez, et al.) are in favor of the government taking shares of companies because they support a Communist playbook. When the Democrats are back in power, they will be able to control private companies. Inconceivable!   
 
ADP EMPLOYMENT (ADP via PRNews wire)
“Private sector employment shed 32,000 jobs in September and pay was up 4.5 percent year-over-year according to the September ADP National Employment Report® produced by ADP Research in collaboration with the Stanford Digital Economy Lab ("Stanford Lab")... "Despite the strong economic growth we saw in the second quarter, this month's release further validates what we've been seeing in the labor market, that U.S. employers have been cautious with hiring," said Dr. Nela Richardson, chief economist, ADP.” Press release at... 
https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-shed-32-000-jobs-in-september-annual-pay-was-up-4-5-302572337.html
 
ISM MANUFACTURING (ISM)
“Economic activity in the manufacturing sector contracted in September for the seventh consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest ISM® Manufacturing PMI® Report...The overall economy continued in expansion for the 65th month after one month of contraction in April 2020.” Report at... 
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-pmi-reports/pmi/september/
My cmt: Manufacturing is expanding, but at a slower rate than previously.
 
CONSTRUCTION SPENDING (Construction Dive)
“Nonresidential construction spending slipped 0.2% in July...The dip marks the third straight monthly decline, with tariffs climbing and labor shortages reemerging. ‘It may be a bleak second half of the year for the construction industry,’ said Anirban Basu, ABC chief economist.” Story at...
https://www.constructiondive.com/news/construction-spending-slide-deepens/759102/
 
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.8 million barrels from the previous week. At 416.5 million barrels, U.S. crude oil inventories are about 4% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.3% to 6711.
-VIX rose about 1% to 16.29.
-The yield on the 10-year Treasury declined to 4.100% (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, 8 gave Bear-signs and 14 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
As noted previously, the price action suggests that weakness in the markets has ended, but the 10-dMA of indicators hasn’t quite bought that conclusion even though the daily indicators have improved. After 3 days down, the S&P 500 has now made 4-days up.
 
The daily, bull-bear spread of 50-indicators improved from +3 to +6 (6 more Bull indicators than Bear indicators), and improved to a mildly Bullish 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 S&P 500 made a new high today. 5.8% of issues on the NYSE made new, 52-week highs. This is below average, but not enough for this indicator to send a correction warning.
 
There was extreme high, unchanged volume Wednesday. I know, you’re tired of reading my standard note:
As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. Are markets turning back down? That could always happen and the indicators are now mixed. Still, “High-unchanged-volume” is not one of my indicators because it is often wrong.
 
I am still waiting for indicators to improve further before I add to stock holdings. Indicators are only slightly bullish and the 10-day remains headed down.
 
BOTTOM LINE
I am cautiously bullish. 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

WEDNESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 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.