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Thursday, August 21, 2025

Philly Fed Index ... Jobless Claims ... Existing Home Sales ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators declined from zero to -8 (8 more Bear indicators than Bull indicators) and is now giving a Bearish indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is still rising – a bullish sign, but just barely. The rate of increase has fallen precipitously.

Indicators have been falling and now they are in bearish territory.

I previously suggested that the index could fall to the 50-dMA. Thursday, the S&P 500 closed 1.8% above its 50-dMA. We’ll have to see if the 50-day holds when the Index get’s there. The Index is 7.2% above its 200-dMA. I doubt that the S&P 500 will decline below its 200-day.

BOTTOM LINE
I have to be bearish now, but I don’t see signs that a big crash is coming.

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 declined, but remained HOLD. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

My current invested position is about 40% stocks, including stock mutual funds and ETFs.
50% invested in stocks is a normal, conservative position for a retiree. (75% 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. 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.

Wednesday, August 20, 2025

Crude Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

This is a screen shot of a FAKE video supposedly of a TV struck stuck during Erin. The video was very convincing, but it was taken down from Facebook very soon after its posting. It IS fake. I can only say that the video was so good that I’ll be even more skeptical of news on the web even when it looks real... and BTW, they don’t need more men in Iceland; women don’t outnumber men 2 to 1, so I am staying in the US.

“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.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

FED MINUTES (CNBC)
“Federal Reserve officials worried at their July meeting about the state of the labor market and inflation, though most agreed that it was too soon to lower interest rates, minutes released Wednesday showed. The meeting summary depicted a divergence of opinion among the central bankers, whose vote to hold their key rate steady came despite objections from two Fed governors who argued in favor of cutting.” Story at...
https://www.cnbc.com/2025/08/20/fed-minutes-august-2025.html
My cmt: There is still a greater than 82% probability of a rate cut in September as implied by 30-Day Fed Funds futures prices. Doesn’t seem right to me.

CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 6 million barrels from the previous week. At 420.7 million barrels, U.S. crude oil inventories are about 6% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf

POWELL MAY DISSAPOINT WALL STREET (Fortune)
“Wall Street overwhelmingly expects the Federal Reserve to cut rates next month, and Chairman Jerome Powell’s speech on Friday will give him a chance to hint at which direction policymakers are headed. But some analysts don’t think a September rate cut is in the bag, and even some who do expect a cut are doubtful that Powell will tease it at Jackson Hole.” Story at...
https://fortune.com/2025/08/17/jerome-powell-jackson-hole-speech-preview-fed-rate-cuts-tariffs-inflation-jobs/

MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 declined about 0.2% to 6396.
-VIX rose about 0.8% to 15.69.
-The yield on the 10-year Treasury declined to 4.291% (compared to about this time prior market day).

MY TRADING POSITIONS:
None

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 10 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 declined from +9 to zero (Equal numbers of Bull indicators and Bear indicators) and is now giving a neutral indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is still rising – a bullish sign.

The S&P 500 fell hard in the morning, tried to regain the losses, but failed late in the day. It seems to be a sign of the continuing investor confusion. Unchanged volume was again extremely high, a sign of confusion that some believe precedes a change in market direction. I’ve never included this in my indicators since it is wrong much more than right.

Overall, indicators continue to drift lower. Breadth (measured by % of issues advancing on the NYSE) still looks OK, so we may just see a decline to the lower trendline. The 50-dMA is often around the lower trendline. The S&P 500 is now about 2.3% above the 50-day, and that is a level of support.

The real question is Fed Chairman Powell’s upcoming Jackson Hole speech. That will be Friday and the “cyber-talk” on financial sites seems to suggest that Powell won’t “pre-announce” they will lower the Fed rates at the September meeting. I haven’t seen much evidence that he would signal an upcoming rate-cut. Instead, he is likely to caution about inflation and suggest the Fed will watch the economic data and act appropriately. So what’s new?

The consensus CNBC view seems to think that if Powell doesn’t signal a rate cut in September, we could see further declines in the market. I don’t know; the consensus is usually wrong when it comes to market direction.

With indicators in neutral territory, I think the market goes down, but my guess is that the 50-dMA will hold. That’s just a guess; indicators are declining, but still in neutral territory.

BOTTOM LINE
I’m neutral. My concern: Indicators have been trending down.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

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.)

Tuesday, August 19, 2025

Housing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

Photo of Buxton NC at Cape Hatteras during the passage of Super Storm Sandy in 2017. This beach faces east and the tops of the waves are being blown off suggesting a southwest wind, i.e., the center of circulation has already passed.

HWY 12 north of Rodanthe, NC on Hatteras Island during Sandy. Sandy did not make landfall on Hatteras Island, but this demonstrates why Hatteras is being evacuated for hurricane Erin even though Erin is not expected to make landfall.

“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.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

THE NATIONALIZATION OF INTEL (WSJ-Excerpt)
“The Trump Administration is reportedly negotiating to take a 10% stake in Intel Corp., in what would amount to a de facto nationalization of the storied but struggling semiconductor firm. Does President Trump really believe that the same government that has so mismanaged air-traffic control can turn around the chip-making giant?... Intel ran a $18.8 billion loss last year and $3.8 billion during the first six months of this year. Such losses aren’t financially sustainable. The company cut 15,000 jobs last year and plans to slash more than 20,000 this year. The chip-maker has also been spinning off businesses, though the Biden team restricted its ability to sell off its foundries. Enter the Trump Administration, which may further expand the government’s role in managing Intel... This is corporate statism, and rarely does it end well. Political control hamstrings innovation and investment as managers look to their government overlords for approval.” The Editorial Board, WSJ. Commentary at...
https://www.wsj.com/opinion/the-nationalization-of-intel-a59fb635?gaa_at=eafs&gaa_n=ASWzDAiZHSMFXi0Nyxq6nAcjh1e1HTry7PpnJmnkTnl7csQh5AwIF_uXdLPmknCBDGk%3D&gaa_ts=68a4a903&gaa_sig=ROKBg66djxVVRUKVGVRrHq5mm4cCL8P4Nl1r6xSah7IQmZa0KuwiK-5mYYYKBZ8AMkx38RYlsNYNgXV1FZc8PQ%3D%3D

TRADERS BUYING DISASTER PROTECTION (Gelonghui finance)
“According to Bloomberg, options traders are increasingly concerned about a potential crash in technology stocks over the coming weeks, prompting many to purchase "insurance" against such an event... From the upcoming Federal Reserve's Jackson Hole Symposium to NVIDIA's earnings report set for next week, these are all potential catalysts for a market downturn.” Story at...
https://news.futunn.com/en/post/60809668/traders-are-buying-disaster-put-options-to-guard-against-the?level=1&data_ticket=1755620210109305

HOUSING STARTS / PERMITS (Yahoo Finance)
“Groundbreaking for new U.S. single-family homes and permits for future construction ticked higher in July... Single-family housing starts, which account for the bulk of homebuilding, increased 2.8%...” Story at
https://finance.yahoo.com/news/us-single-family-starts-permits-124444445.html

MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 declined about 0.6% to 6411.
-VIX rose about 4% to 15.54.
-The yield on the 10-year Treasury declined to 4.310% (compared to about this time prior market day).

MY TRADING POSITIONS:
None

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 6 gave Bear-signs and 15 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 +11 to +9 (9 more Bull indicators than Bear indicators). I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is rising too – a bullish sign.

Breadth is bullish, but indicators continue to drift lower. Breadth (measured by % of issues advancing on the NYSE) still looks OK, so we may just see a decline to the lower trendline. But as we noted yesterday...

We may not see much movement until investors get a better handle on the Fed rate cuts. The next Fed meeting is 16-17 September. Perhaps we’ll get some economic news that will give better clues regarding the rate cut. For now investors can’t seem to decide even though (as implied by 30-Day Fed Funds futures prices) the CME Fed Watch tool gives an 85% chance of a 25 basis-point cut (up slightly from yesterday) and a 15% chance of a 50 basis-point cut (down slightly from yesterday).

BOTTOM LINE
I’m cautiously bullish, although my actions suggest I am neutral to bearish. My concern: Indicators have been trending down.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

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.)

Monday, August 18, 2025

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.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

DEPORTATIONS TO CAUSE INFLATION (Fortune)
“...if Trump continues deporting immigrants at the current rate, inflation will go from 2.5% to somewhere close to 4% “by the time it hits its peak early next year.” Zandi [Mark Zandi, Moody’s chief economist] says his stark prediction is based on recent inflation data. “Foreign-born labor force is declining, and the overall labor force has gone flat since the beginning of the year,” he added. “That’s causing tightening in a lot of markets, adding to costs and inflation.” Story at...
Trump is deporting so many immigrants that it could cause inflation to hit 4% next year, top economist says
My cmt: One of our parishioners is a longtime illegal immigrant. His daughter is here on a medical visa being treated for near blindness. Treatments are only available in the US. He was working for a local hotel, but he was arrested by ICE. He had a deportation hearing recently and the ICE presence was huge at the trial. It makes no sense to me to deport people who are contributing to the economy. Give them a green card instead and make them apply for legal status later. If Zandi is right, Trump’s policies are going to be a disaster for the country. Where do you think the stock market goes if inflation hits 4%?

INTEREST RATES - NOTE OF UNEASE (CNBC)
“Federal Reserve President Austan Goolsbee said Friday a mixed bag of inflation data this week coupled with lingering uncertainty over tariffs have given him some hesitation about lowering interest rates. Previously, Goolsbee has spoken of a “golden path” that would combine moderating inflation and a stable labor market and lead to lower rates. But in a CNBC interview Goolsbee said he still wants to see some more convincing data before the Federal Open Market Committee meets on Sept. 16-17. Goolsbee is one of 12 FOMC voters this year.” Story at...
https://www.cnbc.com/2025/08/15/goolsbee-sees-note-of-unease-as-fed-looks-to-next-interest-rate-move.html

MARKET NEARS A PE OF 30 (Fortune)
“Something doesn’t make sense about the current stock market boom. U.S. big caps keep soaring while the economic outlook keeps getting worse. Right now, the atmospherics, Big Momentum and AI euphoria, are winning over the negative news flow and daunting market metrics. But sooner or later the fundamentals will take charge, and then, watch out for flying glass...the S&P price-to-earnings multiple just hit 29.85 (6,469 divided by $216.69)—I’ll round it to 30. By historical standards, it’s a gigantic, even scary figure...You never know when gravity will take hold, only that it always does.” Story at...
How investors should be thinking as the stock market nears a P/E ratio of 30—a number that spelled disaster before the dotcom crash

NEXT MOVE MAY BE DOWN (MarketWatch)
“...the Goldman team is wary, noting that compared with previous periods of low volatility there is a “less friendly” asymmetry to the stock market. “The risk of a large rally is comparably low, as is common in low vol regimes because the largest rallies tend to occur during recoveries, but the equity drawdown probability is elevated and has increased recently,” they say. They point out the S&P 500 has been boosted by valuation expansion, while credit spreads have tightened markedly, suggesting investors may not be adequately pricing in the risk of the economic damage — slower growth and higher inflation — caused by increased tariffs.” Story at...
Goldman researchers warn of an unfriendly asymmetry: Why the next big market move may be down.

SP500 OVERVALUED VS M2 MONEY SUPPLY (McClellan Financial Publications)
“M2 has grown over time, which is natural as GDP grows. Sometimes the Fed and the Treasury department screw it up, though, creating too much or too little money. They did that in a big way, printing a bunch of extra money in 2020 in response to Covid...The Fed has tried to push the toothpaste back into the tube, and raw M2 saw a 5.7% drawdown as of its low point in October 2023. That was the biggest raw decrease in the history of M2, which dates back in official statistics to 1959...now we are seeing a fairly extreme reading for the ratio of the SP500 to M2...It rivals the peak we saw in August 2000, at the peak of the SP500 tied to the Internet Bubble....
... And that is not to say that the ratio absolutely has to come down this time, just because it has always done so before...If the amount of money is not enough to keep prices aloft, then like the dwindling number of chairs in a musical chairs game, it can set off a response by investors who seek to find enough money to keep playing, or to cover their positions when compelled by margin clerks to do so.” – Tom McClellan. Commentary at...
https://www.mcoscillator.com/learning_center/weekly_chart/sp500_now_really_overvalued_versus_m2/

NAHB INDEX (NAHB)
“In further signs of a soft housing market, the latest HMI survey also revealed that 37% of builders reported cutting prices in August down from 38% in July. This share has remained at 37% or 38% for the past three months. Meanwhile, the average price reduction was 5% in August, the same as it’s been every month since last November. The use of sales incentives was 66% in August, up from 62% in July and the highest percentage in the post-Covid period.” Press release at...
https://www.nahb.org/news-and-economics/housing-economics/indices/housing-market-index

MARKET REPORT / ANALYSIS
-Monday the S&P 500 declined about a point to 6449.
-VIX declined about 0.1% to 14.99.
-The yield on the 10-year Treasury rose to 4.335% (compared to about this time prior market day).

MY TRADING POSITIONS:
None

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 5 gave Bear-signs and 16 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 +16 to +11 (11 more Bull indicators than Bear indicators). I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is rising too – a bullish sign.

Friday there was massive unchanged-volume and today we again saw higher than normal unchanged-volume. I don’t know if this is a turning point, but it does show significant investor confusion.

Indicators have been falling. Even though indicators remain bullish, the declining bull-bear spread is a reasonable warning of potential trouble. With a lot of bull indicators, we can’t declare a significant correction is coming, but it is a concern.

Another concern is the new-high data at the all-time high last Thursday. There weren’t many new, 52-week-highs on the NYSE at the all-time high. The day before, Wednesday, there had also been an all-time high and the new-high data was very good, so it’s hard to assess what this indicator is telling us. This is just one indicator, but it is important because it has been a decent predictor for how deep a correction may be. Now, the mixed signals aren’t giving us a clear answer.

We may not see much movement until investors get a better handle on the Fed rate cuts. The next Fed meeting is 16-17 September. Perhaps we’ll get some economic news that will give better clues regarding the rate cut. For now investors can’t seem to decide even though (as implied by 30-Day Fed Funds futures prices) the CME Fed Watch tool gives an 84% chance of a 25 basis-point cut and a 16% chance of a 50 basis-point cut.

Repeating: I‘m still dragging my feet regarding buying more stocks. I won’t go all-in, since I suspect we’ll get a better buying point before the new-year, but on the other hand, that’s what I think. We need to trade what we see and the indicators are suggesting the markets go higher.

BOTTOM LINE
I’m cautiously bullish, although my actions suggest I am neutral. My concern: Indicators have been trending down.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

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.)

Friday, August 15, 2025

Sentiment ... Retail Sales ... NY Fed Manufacturing ... Industrial Production ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis

TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators declined from +18 to +16 (16 more Bull indicators than Bear indicators). I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is rising too – a bullish sign.

News was mixed today, but I just can’t seem to get over the bad PPI numbers earlier this week. I still haven’t increased my stock positions.

Friday there was massive unchanged-volume. As I’ve often said (too many times I’m sure), many believe that this indicator suggests investor confusion at market turning points. Are markets turning back down? Maybe, but that not what indicators are suggesting. Perhaps the best we can say is that investors are confused. “High-unchanged-volume” is not one of my indicators because it is often wrong.

I‘m still dragging my feet regarding buying more stocks. I won’t go all-in, since I suspect we’ll get a better buying point before the new-year, but on the other hand, that’s what I think. We need to trade what we see and the indicators are suggesting the markets go higher.

BOTTOM LINE
I’m cautiously bullish. My only concern: Indicators are now so bullish it’s scary.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Thursday, August 14, 2025

PPI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“Wholesale prices rose far more than expected in July, providing a potential sign that inflation is still a threat to the U.S. economy, a Bureau of Labor Statistics report Thursday showed. The producer price index, which measures final demand goods and services prices, jumped 0.9% on the month...Excluding food and energy prices, core PPI rose 0.9% against the forecast for 0.3%. ” Story at...
https://www.cnbc.com/2025/08/14/ppi-inflation-report-july-2025-.html
My cmt: PPI tends to lead CPI so, this calls into question the assumed FED rate cut in September.

MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.03% to 6469.
-VIX rose about 2% to 14.83.
-The yield on the 10-year Treasury rose to 4.287% (compared to about this time prior market day).

MY TRADING POSITIONS:
None

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 3 gave Bear-signs and 21 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 improved from +17 to +18 (18 more Bull (!!) indicators than Bear (!!) indicators). I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is rising too – a bullish sign.

The S&P 500 made another new high today, but just barely. Only 2.8% of issues on the NYSE made new, 52-week highs. That’s a bearish stat that, by itself, suggests at least a 10% correction. I’ll ignore this for now. The day was down until the last hour and then the S&P 500 nearly closed lower. I could be wrong, but it seems like that for this to be valid, we would need to see a solid up-day. Weak breadth on that sort of day (signaled by low new-highs) would clearly be a warning. Now, we can’t be sure the signal is valid. The good news is that there were only 3 bearish signs.

The smart move would have been to add to stock holdings today, but I wanted to see how the bad PPI numbers would affect the markets. Surprisingly, they had very little impact. When markets go up on bad news, it’s good news.

I need to get off my lazy butt and add to stock positions.

I won’t go all-in, since I suspect we’ll get a better buying point before the new-year, but on the other hand, that’s what I think. We need to trade what we see and the indicators are suggesting the markets go higher.

BOTTOM LINE
I’m cautiously bullish. My only concern: Indicators are now so bullish it’s scary.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Wednesday, August 13, 2025

Crude Inventories ... 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.

"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." - Bill Smead, Smead Value Fund (SMVLX), May 2025.

FUND MANAGERS LOW ON CASH (The Street)
“There is a school of thought that stock market turning points happen when most investors are overly bullish or bearish. Of course, it's challenging to judge exactly how bullish or bearish is "too" much, which is why the old Wall Street adage "stocks can remain irrational longer than you can remain solvent" is popular.
Still, the latest Bank of America Fund Manager Survey shows Wall Street pros may be getting a bit giddy, which may ring alarm bells for some investors who have been sitting on big profits since April's stock market low... The results show fund managers are "the most bullish FMS since Feb'25," with "cash as % AUM [assets under management] at historically low 3.9%." Story at...
Bank of America survey pours cold water on 'cash on sidelines' argument

BUDGET DEFICIT HIGHER (AP)
“The U.S. budget deficit in July climbed 20% this fiscal year compared to the last despite the U.S. taking in record income from President Donald Trump’s tariffs, according to Treasury Department data released Tuesday...A Treasury official who spoke on the condition of anonymity to preview the data said overall increased spending is in part due to a mix of expenditures, including growing interest payments on the public debt and cost-of-living increases to Social Security payouts, among other costs. This comes as the federal government’s gross national debt creeps up to the $37 trillion mark. [About $370,000 for every taxpayer.]” Story at...
US July budget deficit up 20% year-over-year despite record Trump tariff income

REASONS FOR CAUTION (Marketwatch)
“The stock market surged to a fresh record high on Tuesday after consumer prices edged up slightly in July, with the S&P 500 index ending above 6,400 for the first time in history... Yet a growing concern has been that tariff shocks still lurk on the horizon. Should that happen, higher prices could clamp down further on consumer spending — the economy’s biggest driver. “I am losing sleep based on the unknowns around tariffs,” said Mike Petrakis, founder and chief executive at PowerPay, a fintech home-improvement lender...
...“So far, many businesses have managed to soften the impact of rising costs by relying on pre-tariff inventories, utilizing trade zones and accepting slimmer profit margins,” said Lydia Boussour, a senior economist at EY-Parthenon, in a Tuesday client note...
...“I still don’t think the consumer has fully felt the brunt of all the tariffs,” Ferrara [an investment strategist at Gateway Investment Advisors] said Tuesday. Paying a dollar more for bunch of bananas might be manageable, he said, but anyone needing to buy a big-ticket item, like a new washing machine or a car, could face paying hundreds of dollars more, due to tariffs, he said.” Story at...
As the S&P 500 ends above 6,400 for the first time, here are a few reasons for caution

CPI REPORT SPARKS MIXED FORECASTS FOR FED CUT (The Street)
“American households and investors cheered the latest Consumer Price Index (CPI) report showing tame inflation that could move the Federal Reserve to cut interest rates in September...Traders are now pricing in a nearly 91% chance of a rate cut next month, according to the widely watched CME Group FedWatch Tool...[but] Federal Reserve Bank of Kansas City President Jeff Schmid said he favors keeping interest rates on hold for the time being...Elyse Ausenbaugh of J.P. Morgan Wealth Management said the softness in the July jobs report should be enough to sway FOMC members to resume cuts in the meetings ahead. ‘Overall, it seems fair to say that the Fed could be considering a move in September, but I don’t think a cut at that meeting is as much of a given as market pricing is implying,’’’ Story at...
Cool CPI report sparks mixed forecasts on Fed rate cut

CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3 million barrels from the previous week. At 426.7 million barrels, U.S. crude oil inventories are about 6% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf

MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.3% to 6467.
-VIX fell about 2% to 14.49.
-The yield on the 10-year Treasury declined to 4.238% (compared to about this time prior market day).

MY TRADING POSITIONS:
None

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 3 gave Bear-signs and 20 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 drastically improved from +15 to +17 (17 more Bear indicators than Bull indicators). I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread is rising too – a bullish sign.

The S&P 500 made a new high today. 7.5% of issues on the NYSE made new, 52-week highs. That’s above the average for this stat - so much for the 10% correction-signal I got 2 weeks ago. We don’t have a correction sign now; however, there are a few areas that I’ll be watching :
-Bollinger Bands are giving an overbought-signal. RSI is not, so Bollinger Bands aren’t concerning yet.
-The S&P 500 is 9.2% above its 200-day moving average (200-dMA). That’s elevated, but it won’t trigger a bearish signal until it rises above 12%.

I mentioned that China Tariffs and CPI were mentioned on CNBC as reasons for the big jump higher yesterday. A more likely cause was the weak payroll report 2-weeks ago. That set the stage for a jump. When the CPI news was ok (not great), it suggested to many investors that the Fed would cut in September. I’m not sure I agree with that assessment, but one thing I have learned: go with the majority.

It looks like investors have given the all-clear sign. I may add a little to my stock holdings to bring my stock portfolio up to 50% invested in stocks, Thursday.

I won’t go all-in, since I suspect we’ll get a better buying point before the new-year, but on the other hand, that’s what I think. We need to trade what we see and the indicators are suggesting the markets go higher.

BOTTOM LINE
I’m cautiously bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)