“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
“Firefights and public executions raise concerns about spiral of internecine violence; ‘I could hear gunfire all around.’ A U.S.-brokered cease-fire has hit pause on the war between Hamas and Israel. In its place, a fight between Hamas and other armed Palestinian groups in the Gaza Strip is now under way.
As Israeli troops pulled back last week to facilitate a deal that freed the living hostages still held in Gaza, Hamas surged security forces in behind them—a public assertion of authority intended to make clear the group remains the enclave’s governing power.” Story at...
https://www.wsj.com/world/middle-east/hamas-gaza-israel-withdrawal-33d69b55?mod=itp_wsj
My cmt: Protestors chanted the Hamas slogan, “"From the river to the sea, Palestine will be free." One wonders if this is the “freedom” they had in mind.
“To afford an automobile, more consumers, especially lower-income families, have resorted to buying used cars and taking out longer loans.
Now, more are falling behind on their loans, signaling that lower-income consumers are struggling to afford payments as wages stagnate and unemployment ticks higher. While the economy has remained strong, and Wall Street has kept buying subprime auto loans, the auto market is evidence that not all is well under the hood.” Story at
https://www.wsj.com/business/autos/auto-loans-subprime-late-payments-1d8bb33c?gaa_at=eafs&gaa_n=ASWzDAjL4rAwIUrPOcFg9gXElINpXa7uyu4Dj3qDT6-LmN73a6hvs5rE4tVCtLgpezo%3D&gaa_ts=68efc9f2&gaa_sig=aByo3Ue-RqQo_3QogwLN0kEdyZKwb_ceUjtJdQsgciSJQzL9kXKYvrNc2OJ1LLCRtKAnKtG9BRpUfBhVa-ahew%3D%3D
“...the only PE that matters is the one that that includes all the expenses, and counts only the official profits already in the books. It’s today’s S&P 500 index price divided by the companies’ GAAP net earnings posted over the most recent four quarters. S&P reports that with over 99% of all Q2 2025 EPS now collected, EPS over the trailing year equals $222.55. Hence, the S&P that started September at 6664 and a multiple of 29.94 by just after 3 pm had reached 6696 to hit 30.09... A PE of 30 means big caps stocks are really, really expensive by historical standards. It also signals that from these heights, the chance for big returns going forward over any extended period are low, and the risks of a sharp “reversion to the mean” downdraft is far more likely. In the last quarter century-plus, the S&P PE has only been higher on one occasion that counts. It exceeded 30 for 10 quarters from late 1998 to the close of 2002 during the Dot Com craze. It then took stocks seven years to regain the highs reached in the frenzy.” Story at...
https://fortune.com/2025/09/23/stock-market-crash-predictions-overvalued/
My cmt: The S&P 500 gained almost 20% in 1999. The trick is not to get out too early and not to leave too late. The S&P 500 lost 47% from 2000 thru 2002.
“Economic activity changed little on balance since the previous report, with three Districts reporting slight to modest growth in activity, five reporting no change, and four noting a slight softening. Overall consumer spending, particularly on retail goods, inched down in recent weeks, although auto sales were boosted in some Districts by strong demand for electric vehicles ahead of the expiration of a federal tax credit at the end of September. Demand for leisure and hospitality services by international travelers fell further over the reporting period, while demand by domestic consumers was largely unchanged. Nevertheless, spending by higher-income individuals on luxury travel and accommodation was reportedly strong. Several reports highlighted that lower- and middle-income households continued to seek discounts and promotions in the face of rising prices and elevated economic uncertainty. Manufacturing activity varied by District, and most reports noted challenging conditions due to higher tariffs and waning overall demand. Activity in agriculture, energy, and transportation was generally down among reporting Districts. Conditions in the financial services sector and other interest rate-sensitive sectors, such as residential and commercial real estate, were mixed; some reports noted improved business lending in recent weeks due to lower interest rates, while other reports continued to highlight muted activity. The outlook for future economic growth varied by District and sector. Sentiment reportedly improved in a few Districts, with some contacts expecting an uptick in demand over the next 6 to 12 months. However, many others continued to expect elevated uncertainty to weigh down activity. One District report highlighted the downside risk to growth from a prolonged government shutdown.” Report at...
https://www.federalreserve.gov/monetarypolicy/beigebook202510-summary.htm
“The New York Fed said its general business conditions index surged to a positive 10.7 in October after plunging to a negative 8.7 in September, with a positive reading indicating growth. Economists had expected the index to climb to a negative 1.8... The index reached its highest level since hitting 36.7 in January, as close to half of firms expect conditions to improve in the months ahead.” Story at
https://www.rttnews.com/3582425/new-york-manufacturing-index-unexpectedly-indicates-growth-in-october.aspx
-Wednesday the S&P 500 rose about 0.2% to 6657.
-VIX slipped about 0.1% to 20.78.
-The yield on the 10-year Treasury declined to 4.028% (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, 15 gave Bear-signs and 11 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 -6 to -4 (4 more Bear indicators than Bull indicators), but remained 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.
The Bearish Outside Reversal signal remains in place until the S&P 500 closes above the high on the Reversal Day.
“An outside reversal is a price pattern that indicates a potential change in trend on a price chart. The two-day pattern is observed when a security’s high and low prices for the day exceed the high and low of the previous day’s trading session... Technical analysts and experienced traders prefer to build trading signals using this identification in conjunction with other information such as trend, support and resistance or technical studies.” – Investopedia.
I am Neutral.
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.
