FED Rate Decision … 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.”
 
CAN TRUMP DEFY PRESIDENTIAL STOCK SLUMP (WSJ)
“Patterns like the “Super Bowl Indicator” or “sell in May and go away” can be safely ignored, but there’s an actual reason for the sharp differences in stock-market returns during each of a president’s four years in office: They want to get re-elected and have economic levers to pull…

…The next-weakest year of a presidential cycle [after the second] has been the election year itself.
Those returns have been especially bad—surprise, surprise—when an incumbent was finishing his second and last term, like Trump will in 2028: negative 4.3%.” Story at…
https://www.wsj.com/finance/stocks/can-trump-defy-a-presidential-stock-slump-aae5b710?gaa_at=eafs&gaa_n=AWEtsqdG_-f0nS4DfI0GUY_Z5OiminPp7OMlpncJFpR-SzU5fGcOEgAfNRWL0nJHSZg%3D&gaa_ts=697ab984&gaa_sig=PJc6GtkepnS5_TDdKO3oL_ghusws7DvrMVoirj4J3m9x9JAbckwsbywwB2V3-4XayOnDxR2V8w3NIY825rYmJw%3D%3D
 
GOP’s $100 BILLION TAX BET: MORE REFUNDS WIN MORE VOTES (WSJ)
“The annual tax-filing season that opened Monday will produce a cash surge estimated at $100 billion beyond last year’s $329 billion total, and it is engineered to buoy Republicans’ sagging voter approval. Public confidence in Trump’s economic leadership has slumped, and better-than-expected growth hasn’t overcome Americans’ anxiety about the cost of living and a slowed job market.” Story at…
https://www.wsj.com/politics/policy/tax-season-refunds-republicans-1d4aac5d?gaa_at=eafs&gaa_n=AWEtsqcPMkPeGkbVt6aKCQWstXKiHY629I-lYqdJpuBT10_yrTsL8A5AIQ0ggSAz_l4%3D&gaa_ts=697ab720&gaa_sig=e5awCuwvNwvyoSKde0fVo9tkf60TSMf9ohalE-ZctNDPSlA8FeckxU_iSEmLuHmlEnS0z17FbXKI-E1NmRB1UQ%3D%3D
My cmt: This comes with another $2 Trillion in debt. And Trump wonders why our interest rates are higher than other countries around the world.
 
FOMC RATE DECISION (CNBC)
“Meeting market expectations, the central bank’s Federal Open Market Committee voted to keep its key interest rate in a range between 3.5%-3.75%... In voting to hold the line, the committee raised its assessment of economic growth. It also eased its concerns about the labor market as compared with inflation.” Story at…
https://www.cnbc.com/2026/01/28/fed-rate-decision-january-2026.html
 
-Wednesday the S&P 500 was little changed at 6978.
-VIX was unchanged at 16.35.
-The yield on the 10-year Treasury rose to 4.247% (compared to about this time prior market day).
 
MY TRADING POSITIONS
XLK – Added 11/26/2025 & 12/1/2025
SPY – Added 12/1/2025.
NVDA – Added a small position 12/1/2025.
SSO – Added 1/7/2026; Increased the position 1/21/2026. SOLD 1/28/2026
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 8 gave Bear-signs and 14 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 +6 (6 more Bull indicators than Bear indicators), a BULLISH 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.
 
We still have the bearish rising wedge on the chart.  I’ve shown it in red. The top of the rising wedge on the above chart is around 7,000. We need to see the S&P 500 break above that level to feel better about markets. That will be an important test.
 
The S&P 500 made it up to its upper trendline of the bearish ascending wedge Wednesday, but it quickly retreated. Since I am overinvested, I thought it prudent to reduce risk by selling my leveraged SSO position.
 
It is still up to price action.  Can the S&P 500 break above the bearish ascending wedge? If not I’ll be worried.
 
BOTTOM LINE
I’m bullish and fully invested, but I did sell SSO. I may sell a bit more.  I am still overinvested given market conditions.
 
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
 
WEDNESDAY 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 75% 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.