Saturday, February 28, 2026

PPI … Chicago PMI … 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.”
 
PPI (CNBC)
“The core producer price index, which excludes volatile food and energy prices, increased a seasonally adjusted 0.8%, more than the 0.6% gain in December and well ahead of the Dow Jones consensus estimate for 0.3%.” Story at…
 
CHICAGO PMI (Advisor Perspectives)
“The Chicago Purchasing Managers’ Index (Chicago Business Barometer) climbed to its highest level in nearly four years in February, rising 3.7 points to 57.7. This reading came in above the projected 52.0 and marks the second straight month regional business activity has expanded.” Analysis at…
 
-Friday the S&P 500 declined about 0.4% to 6879.
-VIX rose about 7% to 19.86.
-The yield on the 10-year Treasury declined to 3.949% (compared to about this time prior market day).
 
MY TRADING POSITIONS
SPY – Added 12/1/2025.
NVDA – Added 12/1/2025 & 2/6/2026
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 10 gave Bear-signs and 12 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 declined from +4 to +2 (2 more Bull indicators than Bear indicators), a NEUTRAL indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread (purple on the chart above) that smooths daily fluctuations reversed higher, a BULLISH sign.
 
The S&P 500 is 1.4% below its all-time high back in mid-January. Small corrections (<10%) on average last about a month top to bottom; Corrections >10% last about 2-1/2 months with major bear markets lasting 200+ days. We don’t seem to be in a correction, but markets haven’t been consistent so far this year. Markets do have sideways corrections where they are directionless for several months.  That is a more positive view than the possibility that this weakness might be a prelude to a big correction.
 
My indicators mostly look at the here and now. For now, I don’t see a major correction. Breadth has been generally ok since the beginning of the year, but all is not well with markets. The S&P 500 has now fallen slightly below its 50-dMA and the Bearish Ascending Wedge remains so there is still a concern that the markets could slip into correction.
 
If they do, levels of support on the S&P 500 are 6800, the 100-dMA and the 200-dMA: The S&P 500 is 0.7% above the 100-dMA and 4.9% above the 200-dMA.
 
BOTTOM LINE
I remain a nervous neutral on the markets.
 
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…
 
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…
 
FRIDAY 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 invested position is about 55% stocks, including stock mutual funds and ETFs. 50% invested in stocks is a normal, conservative position for a retiree. (80% 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 although I don’t trade as much as I used to. 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.
 
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