Trump Says, “Don’t Worry” ... 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.
 
CHINA NOT AFRAID OF A TRADE WAR (CNBC)
“China on Sunday said ‘we are not afraid of’ a trade war with the United States after President Donald Trump vowed to impose punishing new retaliatory tariffs on Chinese imports. A spokesperson for China’s Ministry of Commerce accused the U.S. of a “textbook double standard” with Trump’s promise on Friday to tack on additional 100% tariffs on those imports after China imposed new export controls on rare earths minerals.” Story at...
https://www.cnbc.com/2025/10/12/china-defends-rare-earth-export-curbs-as-legitimate-hits-back-at-us-tariffs-ahead-of-possible-trump-xi-meeting.html
My cmt: Vance said the US “will negotiate.” Negotiate? We will give them the advanced chips they are demanding?
 
CHINA RARE EARTH ESCALATION (WSJ)
“China’s newest restrictions on rare-earth materials would mark a nearly unprecedented export control that stands to disrupt the global economy, giving Beijing more leverage in trade negotiations and ratcheting up pressure on the Trump administration to respond. The rule, put out Thursday by China’s Commerce Ministry, is viewed as an escalation in the U.S.-China trade fight because it threatens the supply chain for semiconductors.” Story at...
https://www.wsj.com/world/china/china-trade-rare-earth-restrictions-ai-c2535244?gaa_at=eafs&gaa_n=ASWzDAhsbkYWxidEiD9qfo_SUODk7LCkegcYxzHt0_ccDgu8T5crsbtcL7qMHHai2Ts%3D&gaa_ts=68ec58d7&gaa_sig=h-wrP4zXO5LgMfsws6pbFqO_n2FosI2b7udkhB71mTSbJ-7LY0ShSv8mbJJw1PmDVMicCfLsMlH9Ua1_ErLHnQ%3D%3D
My cmt: Rare earth materials are available outside China, but manufacturing at scale does not exist.
 
TRUMP SAYS DON’T WORRY (CNBC)
“’Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I,’ Trump wrote. “The U.S.A. wants to help China, not hurt it.” Story at...
https://www.cnbc.com/2025/10/12/stock-market-today-live-updates.html
 
WARNINGS FOR THE US ECONOMY (Newsweek)
“The Shiller price-to-earnings (P/E) ratio—calculated by dividing share prices by earnings per share—is used as a long-term gauge of stock market valuations, often employed by investors to spot periods when the market is expensive or unusually cheap. Going back over its 150 year-plus history, the P/E ratio has averaged around 17.3, per the Motley Fool, but it recently closed at over 40 amid the ongoing bull run in U.S. equities.... As noted in an analysis by the Motley Fool, there have only been three times since 1871 when the metric peaked at such high levels—late 1999 and early 2022—both of which preceded major crashes...” Story at...
Stock valuation metric sends warning signal for US economy
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 1.6% to 6655.
-VIX fell about 12% to 23.13.
-The yield on the 10-year Treasury remained 4.059% (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, 17 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
Trump comments bring a rally. Correction? Did I say correction? We were Trumped again - see the “Trump Says Don’t worry” piece above. I don’t know about you, but I’ll need some more evidence that we don’t need to worry.
 
The daily, bull-bear spread of 50-indicators improved from -13 to -10 (10 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.
 
There was talk on CNBC today that the S&P 500 was 35% up in last 6-months. Ryan Detrick of Carson Group pointed out that in prior cases when that has happened, markets have been up 13% a year later. That’s an encouraging stat, but could this time be different? The answer is, “of course.” Indicators are still bearish, so I’m in no rush to buy the dip.
 
BOTTOM LINE
I am Neutral / borderline Bearish, but it is not time to panic. We’ll see. Maybe Trump’s comments will put an end to investor fears.
 
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 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.