Tuesday, March 3, 2026

… 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.”
 
MORGAN STANLEY – Markets will “catch down” (The Street)
“In a recent CNBC interview, Morgan Stanley’s Mike Wilson laid out his blunt two-word verdict on what he feels is happening beneath the surface of the S&P 500.  He argues that even though the index may feel it’s stuck in a relatively tight, give-and-take range, a stealth correction is already well underway. The issue is that the damage isn’t propping up in the headlines…He says that there’s a head-turning 68% spread between the top 50 and bottom 50 stocks year-to-date (the largest in two decades)… the S&P 500 [should] “catch down,” which means that the index would reflect the weakness that we’re already seeing in the average stock.” Story at…
 
CRASH COMING? (The Telegraph)
“Mr Blankfein, who ran Goldman from 2006 until 2018, said the financial system appeared to be moving towards another catastrophe as a result of the boom in private credit, a corner of the market often referred to as shadow banking. He criticized private credit lenders for attempting to encourage retail access at a time when they are most unstable.” Story at…
My cmt: Maybe, but indicators are not currently suggesting a crash
 
-Tuesday the S&P 500 declined about 0.9% to 6817.
-VIX rose about 10% to 23.57.
-The yield on the 10-year Treasury rose to 4.067% (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, 18 gave Bear-signs and 6 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 -2 to -12 (12 more Bear indicators than Bull 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 turned down – a BEARISH indication.
 
Some new bear signs were:
- A New Hindenburg Omen.
-The Fosback short-term Hi/Lo Logic Index.
-The S&P 500 is 1.3% below the 50-dMA and it has been for three days in a row suggesting a trend reversal down.
-The S&P 500 broke below its lower trend line.
-The S&P 500 dropped below its 100-dMA
 
Not all the news was bad.
Tuesday was a statistically significant down-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, down-day is followed by an up-day about 60% of the time,
 
Looking at support levels. The S&P 500 is essentially at 6800 now.  We’ll have to see if that level holds. The 100-dMA was broken today. The 200-dMA of the S&P 500 is 6570, about 3.8% 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.
 
It seems like markets are doing terribly, but the S&P 500 is only 2.3% below its all-time high.
 
BOTTOM LINE
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…
 
TUESDAY MARKET INTERNALS (NYSE DATA)
My basket of Market Internals declined to 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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