Richmond FED … 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
 
CONGRESS GETS A SAY ON IRAN DEAL (WSJ- excerpt)
“All presidents long for the big foreign-policy win. The cameras, the signing ceremony and, not least, the knowledge that they have shaped history. After a war, when markets are looking for calm and the public for reassurance, a president might be tempted to move things along without consulting Congress.
In the case of President Trump’s prospective deal with Iran, that would be unlawful and unconstitutional. It would violate the Iran Nuclear Agreement Review Act of 2015 (Inara), which was enacted while the Obama administration was negotiating its Iran nuclear deal, the Joint Comprehensive Plan of Action. Inara requires congressional review for any agreement related to Iran’s nuclear program before sanctions relief can move forward. More generally, the president can’t use diplomacy to nullify sanctions Congress enacted or disregard the limits Congress placed on his power to waive them.” Opinion at…
https://www.wsj.com/opinion/not-so-fastcongress-gets-a-say-on-the-iran-deal-05cb1696
My cmt: Trump has never been one to follow the Constitution. Unfortunately, this is not new. In addition to the law cited above, the Senate’s “advice and consent” role on Treaties has been bypassed regularly, but especially by Trump and Obama.
“A treaty is a formal, legally binding written agreement between sovereign states or international organizations. It functions like a contract under international law, used to establish alliances, regulate commerce, resolve disputes, or protect human rights.”
So, to avoid the Senate, our leaders call them “agreements”, “accords” (think climate accords) or now “MOUs” - anything but what they are – treaties.
 
MAJOR STOCK MARKET SHOCK POSSIBLE (Moneywise)
“Apollo Global Management CEO Marc Rowan warned that Wall Street may be underestimating the risk of a major "out of the box" economic shock, suggesting a 30% to 35% probability of a significant disruption despite current market highs. "Everything we see in front of us is actually quite strong," Rowan said. But there is "a much greater chance, in our opinion, of out-of-sideline results."… In response, the firm is positioning defensively by upgrading credit quality and building cash reserves…"Combine bonds, gold, infrastructure, real estate and hedge strategies so at least one protector is working in every market scenario."
That way, when there's volatility somewhere in the market, you might not feel the contagions quite as badly in your portfolio.” Story at…
Apollo CEO Marc Rowan says there’s now a 35% chance of a major market shock — and his firm is piling up $40B cash. How investors can prepare
 
RICHMOND FED (City Biz)
“The Federal Reserve Bank of Richmond reported Tuesday that its manufacturing index declined to 4 in June, falling short of economists’ expectations of 8 and down from 13 in May…All three major components of the survey — shipments, new orders and employment — moved lower during the month, signaling softer manufacturing conditions across the Fifth Federal Reserve District.” Story at…
https://www.citybiz.co/article/864351/richmond-fed-manufacturing-index-falls-more-than-expected-in-june/
 
QUICK MARKET SUMMARY
-Tuesday the S&P 500 declined about 1.4% to 7365.
-VIX rose about 10% to 19.01.
-The yield on the 10-year Treasury declined slightly to 4.499% (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, 14 gave Bear-signs and 8 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 -1 to -6 (6 more Bear indicators than Bull indicators), a slightly 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 reversed lower, a BEARISH sign that is also important.
 
The S&P 500 fell to 0.6% above the 50-dMA and appears to be in the vicinity of its lower trendline. In the chart above it looks like the Index is on its lower trendline or slightly lower. It is important to note that trendlines are subjective and depend on the scales chosen when drawing the chart. For that reason, the 50-dMA is more reliable than a trendline. Since the 50-dMA has not been significantly broken, we can’t be too concerned about the recent weakness. So far, it looks perfectly normal and not a sign that more trouble is certain.
 
Breadth indicators are mostly ok, so for now, we’ll have to wait for more information. An important piece of information would be if the Index drops below its 50-day.
 
BOTTOM LINE
I am neutral.                                                                                                 
 
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 declined 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 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.