Wednesday, March 4, 2026

ADP Employment … ISM Non-Manufacturing … 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.”
 
HERITAGE CAPITAL BLOG
“… after 38 years in the business, I have seen my fair share of military actions. The most obvious reaction is usually obviously wrong. People scramble to buy oil, sell stocks, buy gold, buy bonds and buy the dollar. My inclination is to pause and either do nothing or do the opposite. Whatever the media harps on the most, I tend to go opposite.” - Paul Schatz, President, Heritage Capital. Blog at…
 
BANK OF AMERICA SAYS AI WON’T DESTROY THE ECONOMY (The Street)
“BofA’s economists believe the current AI panic misrepresents how economies evolve….History shows us that mechanized agriculture displaced millions of farm jobs, constricting that sector to just 40% of U.S. employment in the early 1900s to about 1% today. Nevertheless, the overall GDP grew at a remarkable pace as new industries surfaced.
In fact, BofA argues that AI will help deliver meaningful productivity gains, functioning more like a supply shock… What’s interesting is that despite all the talk about technological disruption, the recent labor-market softness isn’t clearly AI-driven.” Story at…
 
ADP EMPLOYMENT (ADP via PR NewsWire)
"We've seen an increase in hiring and pay gains remain solid, especially for job-stayers," said Dr. Nela Richardson, chief economist, ADP. "But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs. In fact, the pay premium for switching…
Private employers added 63,000 jobs in February. Hiring jumped in February, delivering the best showing for job gains since July 2025. Construction and education and health services led the growth.” Press release at…
 
ISM NON-MANUFACTURING (ISM)
“The services sector is heating up, with the Business Activity, New Orders, and New Export Orders indexes at their highest levels since 2024, and the Backlog of Orders Index with its best reading since July 2022 (58.3 percent).” Report at… 
 
-Wednesday the S&P 500 rose about 0.8% to 6870.
-VIX declined about 10% to 21.15.
-The yield on the 10-year Treasury rose to 4.094% (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, 19 gave Bear-signs and 5 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 -12 to -14 (14 more Bear indicators than Bull indicators), a BEARISH 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 continued down – a BEARISH indication.
 
“When missiles fly, it’s time to buy” or so some pundits claim. I think that’s a little too pat.  Markets have been weak for several months. It’s hard to say that markets will shrug off weakness because there’s a war going on. Today’s move was on low volume. I’m still cautious.
 
Some support levels are: The 100-dMA is 6835; S&P 500 6800, the level of recent lows.  The 200-dMA of the S&P 500 is 6574, about 4.5% below today’s close.  Another level of support is 6550, the 19 November low. My guess is that the S&P 500 will drop to its 200-dMA around the 6550-6570 level.
 
As noted yesterday, it seems like markets are doing terribly, but the S&P 500 is only 1.6% below its all-time high. The problem is that it is no higher than it was at the end of November.
 
BOTTOM LINE
No change here: I am bearish on the markets in the short-term, but I am not expecting a crash. I’ll hold my current stock positions unless indicators suggest otherwise. I would need to see a lot more deterioration in Breadth before I adjust stock holdings.
 
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…
 
WEDESDAY MARKET INTERNALS (NYSE DATA)
My basket of Market Internals improved to 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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