Friday, March 13, 2026

Inflation … Durable Goods … Sentiment … 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.”
 
PCE INFLATION (Morningstar)
“The January Personal Consumption Expenditures Price Index posted a softer-than-expected increase, up 2.8% from year-ago levels…When volatile food and energy costs are factored out, the Federal Reserve’s preferred measure of inflation increased 3.1% from one year ago…” Story at…
 
DURABLE GOODS (ABA Banking Journal)
New orders for manufactured durable goods decreased $0.1 billion in January to $321.2 billion, virtually unchanged since the previous month…Excluding transportation, new orders increased 0.4%. Excluding defense, new orders increased 0.5%.” Story at…
 
UNIV OF MICH SENTIMENT (Univ of Michigan)
“Consumer sentiment dipped about 2%, reaching its lowest reading of the year. Interviews completed prior to the military action in Iran showed an improvement in sentiment from last month, but lower readings seen during the nine days thereafter completely erased those initial gains.” Report at…
 
QUICK MARKET SUMMARY
-Friday the S&P 500 declined about 0.6% to 6632.
-VIX declined about 0.4% to 27.19.
-The yield on the 10-year Treasury rose to 4.283% (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
S&P 500 drop from the Top: 5%
S&P 500 % above 200-dMA: 0.4%
Days since top: 42. (Avg top to bottom for corrections less than 10% = 32 days, but the 10% correction in Sept of 2023 lasted 64-days top to bottom.)

 

The daily, bull-bear spread of 50-indicators improved from -16 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.
 
As the S&P 500 declined from yesterday’s interim low, volume declined. This may suggest that the bottom of this decline is getting closer.  We can’t be too optimistic; there was very little improvement in internals. Indicators improved some too, but not enough to get excited. It might mean that the Index won’t test its prior low around 6540.
 
That 6540 level is a real possibility if the war in Iran drags on and oil prices remain high.
 
As we have noted before, there were signs at the top that suggested declines would be less than 10%. Since part of the decline is due to events in the middle east, that prediction may be wrong.
 
The 5% decline we have seen so far is a normal bull-market pullback that doesn’t even deserve the title “correction,” but it looks like markets may continue down into correction territory. The index is not far from its 200-dMA and we should watch market action around the 200-day. It is an important support level and I may want to raise some more cash if the 200-dMA doesn’t hold. I tend to be more conservative now, and “return-of-investment” is more important the “return-on-investment.”
 
BOTTOM LINE
No change here: I am bearish on the markets in the short-term; but I remain fully invested at 55% in stocks. The remainder of my portfolio is about 25% bonds and 20% cash. 
 
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 SELL. (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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