San Jose RS Institute: Register to join us in person for a 3-hour educational symposium on relative strength investing. This event is for financial advisors and will offer 3 hours of CFP/CIMA credit.

When: September 18th, 2025, 9 AM EST - 12 PM EST

Where: San Jose Marriott, 301 South Market Street, San Jose, CA 95113

Who: Speakers include...

John Lewis, CMT, Senior Portfolio Manager; Andy Hyer, CFP, CIMA, CMT, Client Portfolio Manager; Ian Saunders, Senior Research Analyst

Cost: Free! Lunch will also be provided.

Registration is limited to the first 75 advisors, so be sure to act fast!

Click Here to Register!

Tariffs continue to be part of the daily market conversation as agreements and deadline extensions seem to occupy headlines. Among the trade agreements to occur just before the August 1^st deadline was with Japan (July 23^rd). Recent weeks have seen further developments in Japanese trade deal as negotiators sought clarity and additional promises from the White House.

Positive developments toward a “done” Japan trade deal have provide fodder for Japanese equities as of late. On the Asset Class Group Scores pages – which evaluates the average fund score for 134 asset class groups consisting of ETFs and mutual funds – the Japan group has moved to an almost 20-year score high at 5.23 and ranking 2^nd out of 134 groups. The score direction for the group – which evaluates a group’s (or fund’s) score improvement within a six-month timeframe – resides above 3 for the first time in a decade, highlighting the abrupt technical improvement in recent months. Coupled with the near-term improvement for the country is also an overbought posture. As of close on 8/18, the average Weekly OBOS reading for the group is north of 100% for the first time since early 2024.

For perspective on the trending improvement seen within Japan, the default point and figure chart for the iShares MSCI Japan ETF (EWJ) is below. After returning to a buy signal and shifting the trend back to positive in the latter half of April, EWJ consolidated in the low to mid $70s from May to mid-July. Following the announcement of the initial trade deal with Japan, the chart completed a triple top at $76 for a second buy signal. Action in August brought improving all-time chart highs with the ETF rallying above $80 during Friday’s (8/15) trading session. As with the broader group, EWJ now resides in overbought territory and at the top of its 10-week trading band. Those seeking exposure to the fund, or other Japanese equity funds, will look for a pullback to the upper $70s or the Weekly OBOS reading falling to within an actionable range ( Weekly OBOS ≤ 60%) before considering. Prior resistance in the mid $70s may be seen as initial support, while additional may be found at $72 and $66, the bullish support line.  

The most wonderful time of the year is here for parents across the country. Of course, we are talking about the back-to-school season, as outlined by Staples in their iconic 1996 commercial. Children seem to be going back to school earlier and earlier these days, with many areas pulling up start dates well before the typical post-Labor Day educational beginning. This may leave you with more time on your hands at this point in August than prior years. Not to fear – we have an update on our Dow Technical Attribute Study to help fill some of that time with a refresh on our technical scoring system.

The Dow Jones Industrial Average has gone through many changes over the years, both in the constituents of the index itself and in its relevance as a main market benchmark. In terms of recent changes, both Amazon (AMZN) and NVIDIA (NVDA) were added to the .DJIA within the last two years.

There are fundamental analysts that rate all 30 Dow stocks as a "buy," "overweight," or "hold". While this subjective system is one of the limitations to using traditional fundamental research, it does provide advisors with an opportunity to differentiate themselves using a logical, organized, sell discipline based upon something grounded in supply and demand like our Technical Attribute ratings.

What are Technical Attributes?

Before we get into the value that implementing Technical Attributes can provide, we first want to walk through the tenets of this rating system. When evaluating a stock (or any investment vehicle for that matter), the two components we are most concerned with are relative strength and trend analysis. The Technical Attribute rating system is simply a means for quantifying the presence (or absence) of those components based on 5 attributes, or “check boxes” a stock can attain:

Five Technical Attributes

Higher equals better in this rating system. If a stock has all 5 of these attributes in its favor, it is considered a technically strong stock. On the other end of the spectrum, stocks with a technical attribute rating of 0 are considered the weakest of names. As a result, they tend to carry more risk and are often market laggards. This is not to say such stocks can't rise, but our odds of outperformance are much narrower with low attribute names (0, 1, and 2) versus high attribute names (3, 4, and 5). Our general rule of thumb is that a Technical Attribute rating of 3 or higher will increase the odds of success. From an implementation standpoint, using Technical Attributes to evaluate existing portfolios, especially those portfolios being transferred over to you, is one straightforward way to add value. For more information on the value of the NDW Technical Attribute Rating system, click here to read our latest whitepaper.

Reviewing the Stocks in the Dow by Technical Attributes

To put some numbers to this rating system, let's look at a Technical Attribute study using the components of the Dow Jones Industrial Average. We update this periodically in the Daily Equity Report, as it allows us to illustrate the benefit of implementing Technical Attributes into your business using a group of companies familiar to us all. We begin by separating the 30 components of the Dow into two categories: "weak attribute" stocks (0, 1, and 2) and "strong attribute" stocks (3, 4, and 5). The objective is two-fold. First, we want to show how each component has done versus the average stock, as represented by the S&P 500 Equal Weight Index SPXEWI. Secondly, we hope to show that using the technical attribute system helps capture the important longer-term trends.

The results of the study convey several relevant pieces of information. For instance, not ALL weak attribute stocks underperform, and not ALL high attribute stocks outperform. I consider this to be a positive, as every time I see a market process that boasts a 100% success rate, I inherently get skeptical. While the TA rating system may not work every time, it does work over time, highlighting stocks that are market leaders and avoiding stocks that are laggards.

This can be seen in the averages from the tables below. There are currently 20 stocks in the Dow with strong TA ratings (3 or higher) as of 8/18/2025. The average length of time the Technical Attribute Rating has been "strong" for these 20 stocks is 557 days. The average outperformance for those 14 names versus the S&P Equal Weighted Index since becoming strong attribute names is over 36%, excluding dividends. Only four of these names have underperformed SPXEWI during their time in the high attribute territory, (PG), (TRV), (KO), and (DIS) with Procter & Gamble being the only one to underperform the benchmark by more than 10%.

On the other hand, the remaining 10 stocks in the Dow are categorized as weak attribute names (2 or lower), and on average, these stocks have been technically weak for 466 days. Once a stock falls below the threshold of 3 positive attributes, this condition of lethargy can persist for an extended period. The average underperformance of these stocks since becoming weak attribute names is -1.59%, illustrating the importance of watching the Technical Attribute pictures for stocks that you own or manage over time. While it hasn’t been a large magnitude of underperformance during the current period, it is far less than the average return of strong attribute stocks which highlights the opportunity costs of sticking with a low attribute name on average.

This screening process can be both a crucial aspect of your portfolio management strategy and an important part of your story with clients and prospects. The "story," in this case, is not "being right all the time." Instead, it is adding a level of analysis to your process that is not afraid to say "sell" when a holding indicates that it has likely gone into hibernation. While these ratings may miss a few modest periods of outperformance or underperformance, it is self-correcting by nature, helping you to stick with the important trends in the market.

Daily Option Ideas for August 19, 2025