Jobless Claims … Leading Economic Index … KC Fed Index … 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.
 
JOBLESS CLAIMS (AP News)
“U.S. unemployment claims fell to 194,000 last week, the fewest in three months and another sign that layoffs remain low and most Americans enjoy extraordinary job security. The Labor Department reported that claims were down from 200,000 the week before.” Story at…
https://abcnews.com/US/wireStory/us-jobless-claims-fell-194000-week-lowest-july-137473790
 
LEADING ECONOMIC INDEX (Conference Board via PR Newswire)
“The Conference Board Leading Economic Index® (LEI) for the US was unchanged in September 2026 at 99.6 (2016=100) … The LEI's six-month growth rate increased slightly, which suggests the economy is still growing and will continue to grow, but is becoming less dependent on consumer spending and more dependent on business investment. The Conference Board now expects real GDP to grow by a 2.2% annualized rate in 2026, with our outlook for 2027 at 2.0%, higher than previously forecasted." Press release at…
https://www.prnewswire.com/news-releases/the-conference-board-leading-economic-index-lei-for-the-us-was-flat-in-september-302917003.html
 
KC FED INDEX (KC Fed)
“Tenth District manufacturing activity increased steadily, and expectations for future activity rose slightly from last month with their highest readings since July 2022. Growth in prices paid for raw materials continued to rise, while finished prices growth eased.” Story at…
https://www.kansascityfed.org/surveys/manufacturing-survey/tenth-district-manufacturing-activity-increased-steadily-in-october-2026/
 
QUICK MARKET SUMMARY
-Thursday the S&P 500 fell about 1.4% to 7645.
-VIX rose about 14% to 19.03.
-The yield on the 10-year Treasury declined to 4.961% (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, 14 gave Bear-signs and 10 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 -4 (4 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 reversed down, a BEARISH sign.
 
Unchanged volume was high again today (Thursday) suggesting confusion among investors. Some think this represents a reversal. Indicators are in the neutral zone so it is hard to say which way a reversal would go. This signal is often wrong, so it is not one of my indicators
 
S&P 500 closed 0.7% below its 50-dMA. The Index is now about 2.2% below its all-time high.  Curiously, some breadth signs are improving – there were 105 new, 52-week highs today and only 53 new-highs yesterday.  Normally, I check this stat at all-time highs. We expect it to be lower on days when the markets decline. When we see breadth improving on declines it suggests markets are nearing a bottom.
 
Unfortunately, volumes overall were higher today suggesting that today was not a bottom. Bottoms occur when selling dries up and volume falls, but the improving breadth may suggest that further declines will be less than my previous warnings of a possible 10% decline.
 
Thursday was a statistically significant down-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, down-day is followed by an up-day about 60% of the time,
 
Bottoms almost always occur on/or near Statistically-significant, down-days, but not all statistically-significant, down-days occur at bottoms. Today could be a short-term bottom, but there were no bullish Bottom Indicators.
 
The S&P 500 broke below the Rising Wedge pattern. Once again, I am looking to see if there will be consecutive closes below the lower trend line at the 50-dMA.
 
We’re getting mixed signals with some signs worse and some better so I’ll just have to wait and see what comes next.
 
BOTTOM LINE
I’m Neutral, but still 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 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 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.