... 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.
 
DEALERSHIPS PREPARING FOR A SIGNIFICANT MARKET CORRECTION (Motor1.com)
“In a viral video with more than 344,000 views, car expert Molly Baxter (@mollybaxter_cars) shared a warning about what she’s hearing in the car world. 
Baxter says dealerships are preparing for a "market correction" unlike anything seen since the 2008 financial crisis. "I don't know exactly what day it's gonna happen, but I do know there's about to be a 30% drop in vehicle prices in a singular day sometime within the next three months," Baxter shares in the video.” Story at...
Expert Says Dealerships Are Preparing for a Major 'Market Correction' That'll See Car Prices Change by 30%
 
UNDERWEIGHT US STOCKS (MarketWatch)
“The S&P 500 is now up 14.6% so far in 2025, the Nasdaq Composite up 18.8%. But that’s not good enough for Tim Hayes, global chief strategist at Ned Davis Research. In a note published Thursday, Hayes says investors should reduce their exposure to the U.S. and increase their weighting in Japan and emerging markets (EM)....
...Among the regional indices, the MSCI Emerging Markets index has posted the biggest advance in 2025, a gain of 25% compared with 14% for the MSCI U.S. index, according to Hayes. And over the last 21 days, the MSCI Japan index has been strongest, gaining 4% compared with a marginal advance for the U.S. And these relative moves have triggered a sell signal for U.S. stocks in NDR’s equity modeling, as the smoothed 20-day change of the U.S. relative strength line...has fallen to its lowest level since the April equity swoon.” Story at...
This strategist’s theory of relativity says it’s time to be underweight U.S. stocks
My cmt: The Ned Davis Research is one of the premier stock market advisory firms in the US.
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 1.2% to 6875.
-VIX declined about 4% to 15.79.
-The yield on the 10-year Treasury declined to 3.987% (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 17 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 +11 (11 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 Monday 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% 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.
 
Today was a Follow-thru day indicated by a “...big gain in rising volume...which confirms that a new uptrend is underway.” - From Investor Business Daly.
 
Bollinger Bands were overbought today, but RSI is solidly neutral for now, so no need to worry - it does not appear that a top is in.
 
There were some negative signs: Today, Monday, was a statistically significant up-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up-day is followed by a down-day about 60% of the time. Tops almost always occur on Statistically-significant, up-days, but not all statistically-significant, up-days occur at tops. There were not enough reliable indicators that were warning of a top.
 
The S&P 500 is 12.9% greater than its 200-dMA. The 10-15% zone is where we often see weakness in the markets and 12% is my sell point for this  indicator (although we never act on just one indicator.)
 
BOTTOM LINE
Overall, indicators remain in good shape; I’m Bullish, but cautious because the Index is stretched above its 200-dMA.
 
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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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.