Housing Starts / Permits … 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.
 
HOUSING STARTS / PERMITS
“Housing starts, a gauge of new residential construction, fell 5.2% in September to 1.221 million. Economists polled by The Wall Street Journal expected a reading of 1.3 million and for starts to rise 2% over the month. Starts were down 7.4% in September from the same month of 2025. Residential permits, another measure of trends in housing construction, ticked down 0.2%...” Story at…
https://www.wsj.com/economy/housing/u-s-housing-starts-dropped-again-in-september-808c2f3d
 
QUICK MARKET SUMMARY
-Tuesday the S&P 500 rose about 0.3% to 7713.
-VIX declined about 6% to 17.31.
-The yield on the 10-year Treasury declined to 5.111% (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 6 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 remained -7 (7 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.
 
Tuesday, there was a bullish outside reversal pattern on the charts.
“A Bullish Outside Reversal is a two-day technical analysis candlestick pattern that signals a potential reversal of a downtrend, indicating that buyers (bulls) have taken control from sellers (bears). It occurs when the current session's price range completely engulfs the previous session's range [today’s high was higher than yesterday; today’s low was lower than yesterday], often appearing as a Bullish Engulfing pattern” – Investopedia.
 
S&P 500 closed 0.1% above its 50-dMA. The 50-dMA is normally the lower, trend line or close to it. Consecutive closes below the trendline (50-dMA) are considered by many to signal a trend change. The Index was below its 50-day Friday and Monday, but not today, Tuesday. The Index is flirting with the 50-day; as long as it stays above it, I am not making changes to the portfolio.
 
The McClellan Oscillator is bullish; other Breadth measures still look weak.
 
I am watching indicators and the S&P 500 chart. Indicators are bearish, but not drastically so. Still, we need to remember that we have already seen weak breadth at the all-time high and that suggests that if we do see a correction, it is likely to be greater than a 10% decline.
 
The markets are entering earnings season. Perhaps good earnings will put an end to the weakness?  The S&P 500 is only 1.4% below the all-time high, so far, the weakness isn’t too weak.
 
BOTTOM LINE
I’m Neutral, but leaning bearish until we can see more bullish signs.
 
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 remained 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.