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:

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 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.