S&P PMI … New 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
 
"Mike Pence didn't have the courage to do what should have been done to protect our Country and our Constitution." – Donald Trump, Tweet sent at 2:24 p.m. on Jan. 6, as rioters attacked the Capitol.
My cmt: If VP Pence hadn’t certified the election, as Trump demanded, in theory, the election would have been settled in the House of Representatives on a State-by-State basis. If all the Republicans had gone along, Trump would have been appointed President in 2020, even though he lost the election.
FYI: The Constitution does not give the Vice President the power to ignore the Electoral College and fail to certify an election. It is probable that if Pence hadn’t certified the election, the Supreme Court would have certified it, but fortunately, Pence was a man of honor (unlike many of our current politicians) and we’ll never know.
 
S&P SERVICES PMI / MANUFACTURING PMI (S&P Global)
“US business activity growth accelerated at the start of the third quarter, according to provisional PMI® survey data, reaching an eight-month high and prompting firms to add staff for the first time in three months.  Business confidence in the year-ahead outlook also rose to an eight-month high.
However, the improvement was confined to services, while manufacturing growth slowed sharply. Supplier delays meanwhile worsened to the greatest extent in nearly four years amid the ongoing conflict in the Middle East. Price pressures also intensified, with input cost inflation reaching a 14-month high and selling price inflation close to a four-year peak.” Report at…
https://www.pmi.spglobal.com/
 
NEW HOME SALES (Yahoo Finance)
“New-home sales in the US climbed in June for the first time in three months as heavy builder discounting helped offset high mortgage rates and subdued consumer sentiment.” Story at…
https://finance.yahoo.com/real-estate/articles/us-home-sales-rise-first-143402237.html
 
QUICK MARKET SUMMARY
-Friday the S&P 500 rose about 0.05% to 7412.
-VIX declined about 1% to 18.58.
-The yield on the 10-year Treasury declined to 4.681% (compared to about this time prior market day).
 
MY TRADING POSITIONS
QLD – Added 5/28/2026
 
NVDA – Added 12/1/2025 & 2/6/2026
“…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
 
XLK – Added 6/5/2026
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 17 gave Bear-signs and 4 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 -9 to -13 (13 more Bear indicators than Bull indicators), a 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 continued down, a BEARISH sign.
 
The S&P 500 closed 0.8% below its 50-dMA. That’s consecutive closes below the 50-day. Many would consider that to be a trend break. Perhaps, but given that this decline is news driven, I am not willing to make changes to the portfolio yet.
 
The 5-10-20 Timer system indicator flashed sell today.  It is based on the 5, 10, and 20-day moving averages of the Index. This contribution to the 50-day indicator spread is somewhat suspect as are other chart crossover indicators. The reason is that the S&P 500 has been nearly flat since early June, as have been moving averages, so it doesn’t take a very big move in the S&P 500 to create a bullish or bearish signal.  
 
Reviewing price action today we note that volume declined, compared to yesterday’s low and there were improvements in market internals. These signals may be suggesting we’ll see higher prices next week.
 
Still, if indicators continue to drop to the point that we see zero bull indicators, it will be time to “panic.” We remember John Hussman’s words: “Faced with a combination of record speculative extremes and deteriorating speculative conditions, investors may want to remember that the best time to panic is before everyone else does.”
 
BOTTOM LINE
I am bearish and will remain so until the S&P 500 climbs above its 50-day or indicators improve. Now, both the chart and indicators are concerning.   
 
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
 
FRIDAY 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 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.