PPI … Jobless Claims … 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
 
WHO REJECTED PEACE IN THE MIDDLE EAST (WSJ)
“In his op-ed “They Forget Who Started the War” (Sept. 1), Elliot Kaufman correctly criticizes a blatantly inaccurate statement made by the current leading candidate for United Nations secretary-general: that in 1948 Israel “violently rejected the two-state solution.” In reality, the Jewish Agency for Palestine accepted the U.N.’s two-state resolution, while the secretary-general of the Arab League promised a “war of extermination and momentous massacre” if Israel established its state pursuant to that resolution. Five Arab states invaded Israel the day after Israel did.
Fast forward 75 years—past multiple other Arab-initiated wars and rejections of two-state solutions—to Oct. 7, 2023, and the war of extermination and massacre Hamas initiated in its effort to galvanize Iran and its proxies to join a new final solution. A Palestinian state could have been created multiple times, over nearly a century, had the Arabs sought a second state instead of the destruction of Israel.
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In 1948, Israel’s U.N. representative, Abba Eban, noted that, under the 1922 League of Nations Mandate and the 1947 U.N. resolution, two Arab states—Transjordan and Arab Palestine—were to be established on seven-eighths of the land originally set aside for the Jews under the Balfour Declaration. He asserted that “many a Palestine Arab may come to compare this prospect, which was peacefully available, with the results of the ‘holy war’”—and that those who in the future would help the Arabs recognize Israel’s permanence would be deemed “in the historic sense, a friend of the Arabs,” because it would free the Arabs to concentrate on their own welfare, rather than on a genocidal war.
These days, the U.N. regularly vilifies the state that supported its two-state resolution—and misstates the history of those who violently rejected it.” - Rick Richman, American Jewish University. From Letters to Editor, WSJ at…
https://www.wsj.com/opinion/who-really-rejected-peace-in-the-middle-east-dca7ba40?mod=letterstoeditor_article_pos12
 
PPI (CNBC)
The producer price index, a measure of final demand costs for goods and services, increased a seasonally adjusted 0.4% for the month, in line with the Dow Jones consensus…On an annual basis, that put the PPI at 5.4%, still well above the Fed’s 2% inflation target and 0.1 percentage point higher than expected…Excluding food and energy, the core PPI accelerated by 0.2%, against the forecast for a 0.3% increase.” Story at…
https://www.cnbc.com/2026/09/10/ppi-inflation-report-august-2026.html
 
JOBLESS CLAIMS (RTT News)
“The report said initial jobless claims edged down to 206,000, a decrease of 1,000 from the previous week's revised level of 207,000.” Story at…
https://www.rttnews.com/3690067/u-s-jobless-claims-unexpectedly-edge-down-to-206000.aspx?type=ts
My cmt: Economists has expected a slight rise I claims.
 
EXISITNG HOME SALES (NAR)
“Existing-home sales decreased by 2.0% in August 2026…“Mortgage rates and home sales move in opposite directions, so it's not surprising to see a mild dip in home buying activity due to high mortgage rates,” said NAR Chief Economist Lawrence Yun. “Still, home prices are rising, and existing home sales are actually up 1.6% year-to-date through the first eight months of the year.” News at…
https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales
 
QUICK MARKET SUMMARY
-Thursday the S&P 500 declined about 0.6% to 7592.
-VIX rose about 8% to 17.84.
-The yield on the 10-year Treasury rose to 4.969% (compared to about this time prior market day).
 
MY TRADING POSITIONS
QLD – Added 5/28/2026
NVDA – Added 12/1/2025, 2/6/2026 & 8/3/2026
XLK – Added 6/5/2026
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 21 gave Bear-signs and 2 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 -15 to -19 (19 more Bear indicators than Bull indicators), a very 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 lower, a BEARISH sign.
 
Breadth has gotten worse.  This important condition for a correction has been met; over the last 10, 50 and 100-days, more than 50% of issues on the NYSE have declined. Others use the advance/decline line for breadth analysis. It is not in great shape either, as shown below.
 

As noted yesterday, the biggest concern in the indicators is that there are only 2 Bull signs, although today one has changed.
 
One of the Bullish signs suggests an oversold condition, because there have been only 7 up-days in the last month. Unfortunately, oversold conditions can remain in place for long periods. I’d need to see more positive signs before we think about a bottom.
 
The other bullish indicator is that the size of up-moves has been greater than down-moves. This is one of my oldest indicators – it just seems logical that in a down market, the size of down-moves will outpace the size of up-moves. 
 
The S&P 500 closed slightly below its 50-dMA, 0.2% below to be more exact. Consecutive closes below levels of support often suggest a trend-change. We’re still watching the 50-day, and the Index lower trendline.
 
As noted yesterday, we have seen markets recover from this sort of low-bull number without much of a correction in the past, so it is not time to panic. However, it is time to pay close attention.
 
Market action recently has been uncomfortable since it hasn’t advanced much since early June. On a positive note, the S&P 500 is only 2.1% below its 13 August all-time high of 7799.
 
Volume increased today compared to the prior low so selling doesn’t appear to be done yet, at least from technical indications.  Good inflation news or good news from Iran could always send markets higher.
 
I’ll be watching the Index 50-day average and indicators.  If we lose the last 2 bull indicators, I’ll make changes to the stock portfolio. We’ll watch the 50-day too.
 
BOTTOM LINE
I remain neutral, but concerned.
 
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
 
THURSDAY 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.