… Momentum Trading DOW Stocks & ETFs … Stock Market Analysis

 

 

Dick Wright has been an award-winning editorial cartoonist for decades, drawing for the San Diego Union, the Providence Journal, Scripps-Howard Newspapers and the Columbus Dispatch.

 

“It didn’t take Gov. Abigail Spanberger (D-VA) long to start turning Virginia into California. And by “California,” I don’t mean the fantastic weather. No, Spanberger is turning Virginia into the “Golden State” by implementing policies that will likely be a buzz killer for businesses. At least one major player has announced that it is relocating. But it’s a big one: Boeing.

The problem is that Spanberger ran as a female version of John Fetterman, the centrist senator to the north in Pennsylvania. But since she was sworn in on Jan. 17, she has been governing as Gov. Gavin Newsom (D-CA).” Story at…

Is Abigail Spanberger’s Virginia the new California?

 

“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.”

 

-Thursday the S&P 500 declined about 0.5% to 6909.

-VIX rose about 4% to 18.63.

-The yield on the 10-year Treasury declined to 4.004% (compared to about this time prior market day).

 

MY TRADING POSITIONS

SPY – Added 12/1/2025.

NVDA – Added 12/1/2025 & 2/6/2026

 

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:

At the close today, of the 50-Indicators I track, 8 gave Bear-signs and 12 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 +2 to +4 (4 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.

 

CNBC reported, “Nvidia shares dropped 5% on Thursday, as investor concerns around its leadership in the artificial intelligence boom dampened enthusiasm over its earnings beat. The company reported stellar quarterly results, but the numbers were not enough to assuage Wall Street amid an already fragile time for stocks.” 

 

Nvidia nearly doubled its revenue! It was up more than 5% in after-hours trading yesterday, but then faded and continued the fade today. It finished down more than 5%. This suggests that we may finally get the correction that markets have been flirting with. Does it start Friday? Not if the pattern of up and down price we’ve seen recently continues. Further, indicators are not overly negative, although today there was a new bear sign.

 

Today there was another Distribution Day. That’s 6 Distribution days in the last 5 weeks. Here’s what Investor’s Business Daily says about that:

“A distribution day in the stock market occurs when a major index (like the S&P 500 or Nasdaq) closes down by 0.2% or more on higher volume than the previous session. It signifies heavy selling by institutional investors, with 4–6 such days over a 4 to 5-week period often signaling a potential market top or reversal.”

 

My indicator uses 6 or more distribution days in 5-weeks as a bearish indicator. As noted before, markets are not out of the woods yet.

 

The S&P 500 is 1% below its all-time high. It has now bounced slightly above its 50-dMA. That’s a positive sign, but the Bearish Ascending Wedge remains so there is still a concern that the markets could slip into correction.

 

If they do, levels of support are 6800, the 100-dMA and the 200-dMA: The S&P 500 is 1.2% above the 100-dMA and 5.4% above the 200-dMA.

 

BOTTOM LINE

I remain a nervous neutral on the markets.

 

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 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 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.