PPI … Chicago PMI … 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.”
 
THANK HEAVEN FOR COAL POWER (WSJ – Excerpt)
“The weekend’s arctic blast [last weekend] has put much of the U.S. grid through a stress test and served as another alert about the growing risks to electric-power reliability. Americans can be grateful the Biden crowd didn’t succeed in forcing all coal plants to shut down…Early Sunday morning, coal accounted for some 40% of power in the Midwest’s MISO grid, 24% in the eastern U.S. PJM Interconnection and 18% in Texas, with most of the rest coming from natural gas and nuclear.
New York’s blockade on gas pipelines has constrained the fuel supply for power plants across New England. Power plants in the region had to resort to burning oil, which accounted for 40% of electricity at times of peak demand. Get this—the region generated more power from burning wood and trash than from wind power…The deep-freeze energy scare underscores why the Energy Department issued emergency orders in recent months to “stop the political closure of coal plants” in the Midwest. The grid needs all the coal power it can get when temperatures plunge or skyrocket. Environmental groups have challenged the department’s orders. Is the goal to reduce carbon emissions by making Americans freeze?” – Opinion at…
https://www.wsj.com/opinion/thank-heaven-for-coal-power-in-the-cold-dc3b9a33?gaa_at=eafs&gaa_n=AWEtsqebrQ2_HVHNcQqVweZyLA8spRlqpk3UnViEp-yHCw25Plf1QMj5axw5r59ELnE%3D&gaa_ts=697c18bf&gaa_sig=b3M0bUS78uyOI_Ied-DACWqF2DbBynUUmjTXIyDz-66W-NkEwqEGSNXY_P2SkKCQIg7kDFU3_xsrYNg4V_fW3Q%3D%3D
 
AMERICA DOESN’T DO FASCISM (WSJ)
“…This week the Atlantic published an essay headlined “Yes, It’s Fascism,” in which Brookings Institution scholar Jonathan Rauch draws up a series of categories— “demolition of norms,” “might is right,” “police-state tactics,” “blood-and-soil nationalism”— that in his view describe both Mr. Trump and “classical” fascism of the 1930s…
…I assume Mr. Walz knows the difference between the Gestapo and federal ICE agents, and between detention centers for illegal immigrants and Bergen-Belsen… But some not insubstantial number of these politicians’ listeners take their assertions both seriously and literally. That so many people in Minneapolis have endangered themselves by waving phones in the faces of armed federal officers and shouting obscenities as if they were psychotic is one of many unhappy consequences. American public figures have a duty to think better of their country than to believe it capable of putting a fascist in the White House. Some of them might ponder the possibility that he wouldn’t be there at all were it not for excesses they cheered at the time.” - Barton Swaim., Opinion Columnist, Unruly Republic, The Wall Street Journal. Commentary at…
https://www.wsj.com/news/author/barton-swaim
My comment: Looking at it rationally produces another conclusion. During the campaign preceding the 2020 election, Trump said he would close the borders and evict all illegal immigrants. He was subsequently elected and is doing exactly what he said he would do. That is Democracy – not Fascism.
 
Further, if those who were being arrested went peaceably, and protestors were respectful, there would be no claims of fascism.
 
PPI (Reuters)
“The PPI for final demand jumped 0.5% last month, the biggest rise since ‌July, after an unrevised 0.2% gain in November… In ​the 12 months through December, the PPI increased 3.0%...” Story at…
https://www.reuters.com/world/us/us-producer-prices-accelerate-december-services-2026-01-30/
 
CHICAGO PMI (Investing.com)
“The Chicago Purchasing Managers’ Index (PMI), a key indicator of the economic health of the manufacturing sector in the Chicago region, has reported a significant expansion. The actual reading for the index stood at 54.0, indicating a robust growth in the sector.” Story at…
https://ca.investing.com/news/economic-indicators/chicago-pmi-signals-manufacturing-sector-expansion-surpasses-expectations-93CH-4429573
 
-Friday the S&P 500 declined about 0.4% to 6939.
-VIX rose about 3% to 17.44.
-The yield on the 10-year Treasury rose to 4.241% (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.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 10 gave Bear-signs and 11 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 +1 (1 more Bull indicators than Bear 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 continued down, a BEARISH sign.
 
Friday there was a Hindenburg Omen
“The Hindenburg Omen is a technical analysis indicator that attempts to predict stock market crashes by identifying periods of market instability. It is named after the Hindenburg disaster, a German airship that caught fire in 1937. The omen is triggered when specific market conditions, such as a large number of stocks making both new 52-week highs and lows, occur within a short time frame.” – Investopedia.
 
Hindenburg Omens don’t have a great record of being correct; however, they do tend to give a good signal if there is a cluster of Omens. So far, we’ve seen only one. Further, the Fosback High-Low Logic Index uses a similar method of analysis. It is closer to a Buy-signal than a sell.
 
Breadth is falling. That’s a concern. The first warning signal flashed today - over the last 2 weeks, more issues on the NYSE have gone down than have gone up.
 
The S&P 500 is likely to make another visit to the lower trendline. The 50-dMA is about 1% below today’s close at 6858. That is a likely stop for this weakness.
 
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. Now the worry is the lower trendline – will it hold? I think so, but we’ll find out soon.
 
Breadth was good at the recent all-time-high. As a result, I don’t expect markets to retreat too far. If economic issues continue to decline, this opinion will have to change.
 
BOTTOM LINE
I’m cautiously bullish and fully invested.
 
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
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals declined to SELL. (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 70% 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.