NAHB Housing 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.
 
THE MARKET HAS ALREADY CRASHED (Yahoo Finance)
“Investors worried about a broader stock market collapse, fear not. A meltdown has already happened with lots of stocks having tumbled in value, according to Wall Street veteran Larry McDonald…
…Even with the S&P 500 recently reaching a fresh record high, the market has “crashed internally,” McDonald, author of The Bear Traps Report, told the Julia La Roche show in an interview that was published on Thursday. “If you look at the amount of Hall of Fame brands, Harley-Davidson, down 30%, 40%, Lennar, 45%, just really great American brands,” getting crushed, he said…
…McDonald said CoreWeave is a “serial convertible issuer.” Past examples of companies repeatedly coming to that market for funding included Tyco and Enron. Therefore, “it’s a real warning sign because it’s the last saloon.”
“The last two times we saw this was in 1999 and 2021, and in both cases, this was incredibly foreshadowing for an event coming at us,” he said. The dot-com crash followed in 2000, while 2022 proved a losing year for stocks, especially tech names partly due to rising U.S. interest rates…” Story at…
The stock market has already crashed: Why a Wall Street veteran says Nike is the ultimate turnaround trade
 
NAHB HOUSING (NAHB)
“Current sales conditions fell two points to 33… Sales expectations in the next six months dropped five points to 32…
The latest HMI survey found that 43% of builders cut prices in October, the highest share during the 2020-2026 period. The average price cut remained at 6% for the seventh consecutive month. Meanwhile, 65% of builders reported using sales incentives in October, the 19th straight month at least 60% of builders have done so.” Report at…
https://www.nahb.org/news-and-economics/housing-economics/indices/housing-market-index
 
QUICK MARKET SUMMARY
-Monday the S&P 500 rose about 0.4% to 7691.
-VIX declined about 8% to 18.44.
-The yield on the 10-year Treasury rose to 5.144% (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 declined from -5 to -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 reversed down, a BEARISH sign.
 
I am watching indicators and the S&P 500 chart. Indicators are bearish, but not drastically so. 
 
The chart of the Index might be considered bearish. S&P 500 rose, but still closed 0.2% below 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. Is 0.2% close enough to be ok? Do I sell? No.
 
I am holding on for now. I want to see if the S&P 500 continues higher. Volumes are lower than they were at prior recent lows so we may have seen a bottom, at least for a while. I’m not confident in that view since volumes alone are not a great predictor for bottoms. Still, the Index is only 1.6% from its all-time high, so there is no rush to sell even if we begin to see faster declines.
 
The McClellan Oscillator is bullish, but just barely. Breadth still looks weak.
 
Importantly, 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.
 
I’ll be watching to see if the S&P 500 closes below its 50-dMA again; that would be more evidence of a trend break and I will need to consider reducing stock holdings somewhat. The size of stock sales, if we do see the trend break, will depend on signals from other indicators.
 
So far, there are still 7 bull-indicators and that is not bad.
 
BOTTOM LINE
I’m Neutral, but leaning bearish.
 
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
 
MONDAY MARKET INTERNALS (NYSE DATA)-

My basket of Market Internals remained 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.