Business Optimism … Existing Home Sales … 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.
 
“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.
 
“There’s a lot of exuberance out there,” Dimon continued. “But it was in 1972, 1986, 2000, 2007. That doesn’t give me comfort.” – Jamie Dimon
 
A SIGNAL THAT IS NEVER WRONG (Benzinga)
“The S&P 500 just had one of the best two-month rallies ever, as it was up 19.5% in two months on 5/29/06.”
While the index recently suffered a sharp drop on Friday—marking its worst single day of the year so far—market historians urge investors to look at the bigger picture. Following such a 19% rally over two months, stocks were “never lower 1 month, 3 months, 6 months, or a year later.” Story at…
S&P 500 just triggered a signal that has never failed since 1950—Ryan Detrick says 'my oh my'
 
NFIB BUSINESS OPTIMISM
Business Optimism Index fell 0.6 points in May to 95.3, remaining below its 52-year average of 98.0…“Despite the enthusiasm around AI, the overall picture is divided. More small business owners are struggling with significant and unpredictable hikes in fuel prices, which are more challenging for small businesses to pass on to their customers compared to their larger corporate competitors.” Report at…
https://www.nfib.com/news/press-release/new-nfib-survey-small-businesses-report-reduced-optimism/
 
EXISTING HOME SALES (NAR)
“Existing-home sales increased by 3.2% month-over-month and year-over-year, according to the National Association of REALTORS® Existing-Home Sales report.” Report at…
https://www.nar.realtor/press-releases/nar-existing-home-sales-report-shows-3-2-increase-in-may
 
QUICK MARKET SUMMARY
-Tuesday the S&P 500 declined about 0.3% to 7387.
-VIX rose about 5% to 19.87.
-The yield on the 10-year Treasury declined to 4.530% (compared to about this time prior market day).
 
MY TRADING POSITIONS
QLD – Added 5/28/2026
NVDA – Added 12/1/2025 & 2/6/2026
“According to the 54 analysts' twelve-month price targets for NVIDIA, the average price target is $278.73. The highest price target for NVDA is $360.00, while the lowest price target for NVDA is $205.00.”- MarketBeat at… 
https://www.marketbeat.com/stocks/NASDAQ/NVDA/forecast/
XLK – Added 6/5/2026
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 15 gave Bear-signs and 9 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
Friday, I drew the lower trend line on the “Summary of 50 Indicator Spread” chart where it seemed to make sense and I am showing it there again today. It appeared to me that the big drop on Friday took the S&P 500 down to its lower trend line. Checking the 50-dMA for the Index, we note that the S&P 500 is 2.7% above its 50-dMA.  That is usually around the lower trend line, so I may have been too optimistic. Now it looks like further declines are possible, at least down to the 50-day.
 
The daily, bull-bear spread of 50-indicators declined to -6 (6 more Bear indicators than Bull indicators), a mildly 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 declined, a BEARISH sign that is more important than the daily numbers.
 
Today, Tuesday, was a Bearish Outside Reversal Day.
“An outside reversal is a price pattern that indicates a potential change in trend on a price chart. The two-day pattern is observed when a security’s high and low prices for the day exceed the high and low of the previous day’s trading session... Technical analysts and experienced traders prefer to build trading signals using this identification in conjunction with other information such as trend, support and resistance or technical studies.” – Investopedia.
The Bearish Outside Reversal signal remains in place until the S&P 500 closes above the high on the Reversal Day. 
 
There was another Hindenburg Omen, Tuesday.
Hindenburg Omens don’t have a great record of being correct; however, they do tend to give a good signal if there is a cluster of Omens. We’ve seen 10 in the last 21 trading-session. So, the Omens are a concern.
 
The Short-term Fosback Hi/Low Logic Index is now issuing a sell signal. Both new-52-week highs and 52-week lows have been elevated. This indicator is similar to the Hindenburg.
 
Interestingly, the McClellan Oscillator improved a lot today due to today’s positive breadth. 64% of issues on the NYSE advanced today and the Oscillator improved to about -20. If it get’s above zero, at least 3 indicators (McClellan Oscillator, Hindenburg, Fosback Hi-Lo Index) will switch from bearish to bullish.
 
Still, Breadth has been weak. Over the last 10-days, more issues have gone down on the NYSE than have gone up. In addition, I have an indicator that compares breadth to the S&P 500; the Index is too far ahead of breadth so, it too is bearish.
 
BOTTOM LINE
I am neutral – indicators are on edge. Let’s see where we go.
 
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…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
 
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…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
 
 
TUESDAY 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 60% 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.