“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
“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.
“That juxtaposition—banks minting money while IBM suffered a 115-year collapse on a 3.7% revenue miss—is the puzzle at the center of what Hanke, a professor of applied economics at Johns Hopkins, thinks markets are getting dangerously wrong about the AI boom. For two years, investors have been debating whether AI stocks are too expensive. Hanke said that’s true, but it’s the wrong question. “We really have two bubbles in markets,” he told me. One is a classic valuation bubble of price versus earnings, as exemplified by the famous CAPE Shiller index. But the more dangerous mispricing, he argued, isn’t in valuations at all. It’s in the earnings themselves…
…IBM’s crash may be the first visible crack not in valuations but in the earnings story underneath them: a company whose numbers weren’t that bad still got punished as if the market suddenly stopped believing the profit growth narrative altogether. Whether that’s a single-stock anomaly or a signal that the market has quietly repriced its tolerance for earnings disappointment across the sector is the question the rest of earnings season will start to answer.
For now, the more dangerous question may have been hiding in plain sight the entire time—not whether AI stocks are too expensive, but whether the earnings behind them were ever as real as they looked.” Story at…
Why IBM just suffered its worst stock crash of all time—and what it says about the market’s two bubbles
“New U.S. unemployment claims fell by 8,000 to a seasonally adjusted 208,000 for the week ending July 11, coming in lower than economists’ forecasts of 217,000.” Story at…
https://sjvsun.com/u-s/jobless-claims-drop-indicating-continued-labor-market-strength/
“…regional manufacturing activity soared by much more than expected in the month of July. The Philly Fed said its diffusion index for current general activity skyrocketed to 41.4 in July from 10.3 in June, with a positive reading indicating growth. Economists had expected the index to rise to 13.0.” Story at…
https://www.rttnews.com/3667688/philly-fed-index-soars-to-nearly-five-year-high-in-july.aspx
“Spending at US retailers last month was weaker than expected, despite the World Cup drawing tourists from around the world and online sales events. Retail sales rose 0.2% in June from the prior month…” Story at…
https://www.cnn.com/2026/07/16/economy/us-retail-sales-june
My cmt: I asked Google AI about year-over-year retail sales gain. The response was: “US retail and food services sales in June rose to $768.6 billion—a 6.7% increase year-over-year.” Can’t complain about that number.
-Thursday the S&P 500 declined about 0.5% to 7534.
-VIX rose about 7% to 15.67.
-The yield on the 10-year Treasury rose to 4.557% (compared to about this time prior market day).
QLD – Added 5/28/2026
“…the market appears to be pricing Nvidia as though its best growth opportunities are behind it. This is not the first time such a rerating has occurred with Nvidia. In earlier instances when Nvidia's forward P/E contracted amid consolidation or shifting sentiment, subsequent evidence of accelerating revenue and profitability triggered multiple expansions. This pattern is consistent: Once operational results confirm that the company's AI-driven growth is continuing, investors eventually reengage, and the valuation rerates higher… Patient investors who recognize that Nvidia's recent price action reflects investor caution rather than a fundamental deterioration of its thesis can position themselves to benefit from meaningful share price appreciation as the chip giant continues to execute.” – Motley Fool at…
Nvidia stock has only gained 5% so far in 2026. History is crystal clear on where the stock is headed next
At the close today, of the 50-Indicators I track, 5 gave Bear-signs and 16 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.)
The daily, bull-bear spread of 50-indicators improved from +8 to +11 (11 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.
Advancers outpaced
decliners; advancing volume was slightly higher than declining volume and new-highs
far out numbered new-lows. Good
internals usually are good for the S&P 500 so we should see an up-day
tomorrow. Unfortunately, futures are down as I write this Thursday evening.
So far Breadth remains in bullish territory and
indicators continue to improve. Will price follow? It usually does, as shown in
the Summary of 50-Indicator Spread above.
BOTTOM LINE
I am bullish.
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)
Google has replaced Verizon in the Dow 30. It will take a while for me to update the momentum chart.
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
THURSDAY 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 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.
I am bullish.
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
Google has replaced Verizon in the Dow 30. It will take a while for me to update the momentum chart.
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
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.
