CPI … 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.
 
CPI (CNBC)
“The overall report shows inflation is uncomfortably strong,” said Mark Zandi, chief economist at Moody’s. 'The war’s fingerprints are all over the report,” he said. “It’s driving a lot of the inflationary pickup.' …
…Wednesday’s CPI report 'gives more support to the argument that the Fed is going to continue raising rates,'” Zandi said.
Chart from…
https://www.cnbc.com/2026/10/14/cpi-inflation-breakdown-september-2026.html
 
QUICK MARKET SUMMARY
-Wednesday the S&P 500 declined about 1.1% to 7719.
-VIX rose about 10% to 16.87.
-The yield on the 10-year Treasury declined to 5.108% (compared to about this time most recent trading day).
 
MY TRADING POSITIONS
NVDA – Added 12/1/2025, 2/6/2026 & 8/3/2026. Reduced position 10/7/2021
XLK – Added 6/5/2026.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 13 gave Bear-signs and 11 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 +6 to -2 (2 More Bear indicators than Bull indicators), a NEUTRAL 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.
 
The Bearish Wedge pattern remains. Today the S&P 500 dropped to its lower trendline along the bottom of the wedge. The trendline would be broken if we see consecutive closes below it; that signals a trend break and suggests more selling would then be likely. The S&P 500 isn’t there yet. We might see the Index shake its doldrums and move higher. That doesn’t seem the most likely path now; it appears to me that the mood has changed.
 
I mentioned yesterday that more than half of the issues on the NYSE have been advancing over the prior 10-days. That was true then, but not now. Breadth has declined; the McClellan Oscillator turned bearish again and that brings back the Hindenburg Omen signal that is still in the danger zone now that the Oscillator is bearish.
 
As mentioned before:
We continue to watch indicators, but price is more important now.  The S&P 500 will break out of its rising wedge; will it be higher of lower? Indicators are now Neutral so any prediction would only be a guess (as is my comment above).
 
BOTTOM LINE
I’m 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
 
WEDNESDAY 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 55% 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.