Monday, April 20, 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.”
 
“Never, never, never, believe any war will be smooth and easy, or that anyone who embarks on that strange voyage can measure the tides and hurricanes he will encounter. The Statesman who yields to war fever . . . is no longer the master of policy but the slave of unforeseeable and uncontrollable events.” - Winston Churchill.
 
INVESTING OR GAMBLING (WSJ - Excerpt)
“The biggest danger isn’t that the markets can go crazy, but that they’ll make you go crazy, too. The war in Iran is a seething stalemate, the price of oil is up about 60% this year, inflation jumped to 3.3% in March—and still U.S. stocks set all-time highs this week. A kind of gambling fever seems to be setting in…
…With the stock market marching upward as if all is right in the world, and with gambling behavior becoming the norm around us, it’s more important than ever to ask yourself a few questions before you make any trade. Here’s a simple checklist: Have I segregated this account from my long-term investments? Am I trading to make money or to have fun? What do I know that the person on the other side of this trade doesn’t? How do I know it? Am I willing to keep track of all my trades to see whether I’m making money on them overall? 
You won’t fall into a downward spiral of impulsive trading if you require yourself to pause and think before any gamble.” - Jason Zweig. WSJ, The Intelligent Investor column. Full commentary at… 
 
WARREN BUFFETT’S 90/10 RULE (Investopedia)
“Warren Buffett's 90/10 strategy involves allocating 90% of assets to a low-cost S&P 500 index fund and 10% to short-term government bonds.
-The 90/10 rule offers simplicity, lower fees, and the potential for higher returns.
-The strategy is based on historical returns for the S&P 500, as well as Buffett's skepticism about the performance of the average fund manager.
-Critics say such a high allocation to equities isn't suitable for all investors, particularly those nearing retirement or already retired.” …
 
RALLY HAS ROOM TO RUN (MarketWatch)
“McElligott [Nomura strategist] believes this market upswing could go on for a while, because of just how underexposed investors have been.
But there are two things that could bring it to a halt, the Nomura strategist warns. The first is if May starts to show the signs of a “physical energy gut-punch from the actual barrels and petrochem-shortages.” Subsequent higher prices on those commodities could see central banks panic into tightening interest rates given the energy supply shock, and that leads to his second potential flag — a bond-market selloff. He sees that possible as fears over energy shortages and rate hikes could trigger “eventual negative growth shocks around the world,” potentially dragging major economies into recession. Once bond yields start rising, markets could get spooked, halting the current chase higher for markets.” Story at…
 
QUICK MARKET SUMMARY
-Monday the S&P 500 declined about 0.2% to 7109.
-VIX rose about 8% to 18.87.
-The yield on the 10-year Treasury declined to 4.248% (compared to about this time prior market day).
 
MY TRADING POSITIONS
SPY – Added 12/1/2025.
NVDA – Added 12/1/2025 & 2/6/2026
“Despite all the bearish noise, Goldman Sachs isn’t backing down on Nvidia (NVDA) stock yet. After another stellar GTC showing, the bank reiterated its $250 price target and maintained a buy rating, underscoring confidence in the AI giant’s tremendous upside from current levels.” Story at…  
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 5 gave Bear-signs and 20 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 remained +15 (15 more Bull indicators than Bear indicators), a BULLISH 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 higher, a BULLISH sign that is more important than the daily numbers
 
RSI and the Advance/Decline Ratio both remain overbought. I wouldn’t be surprised to see a little more weakness in the markets. Overall though, indicators look very good and I don’t expect declines to be big. A retest of the prior low is possible, but not likely.
 
Surprisingly, Sentiment remains bearish. I measure Sentiment as a 5-day average of %-Bulls (Bulls/{bulls+bears}) based on the amounts invested in selected Rydex/Guggenheim mutual funds. The recent decline in sentiment is bearish enough, on a standard deviation basis, to be sending a bullish signal. That suggests that the market can go higher; I expect that it will, perhaps after some more weakness.
 
I won’t chase this market, but as the war news gets better, I may get more comfortable with adding to stock positions. As a retiree, I am conservative. It is better not to lose than it is to worry about making every penny.
 
BOTTOM LINE
I am bullish, but markets are overdue for a down-day.
 
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…
MONDAY MARKET INTERNALS (NYSE DATA)
My basket of Market Internals improved to BUY. (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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