Chicago PMI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis

NY TO TAX AMERICA FOR CLIMATE CHANGE (WSJ)
“Gov. Kathy Hochul on Thursday signed legislation that will require fossil-fuel producers to pay $75 billion to supposedly help the state adapt to climate change. “This landmark legislation shifts the cost of climate adaptation from everyday New Yorkers to the fossil fuel companies most responsible for the pollution,” Ms. Hochul’s office declared. She’s right about shifting costs, but those who will pay her climate tax are American fossil-fuel workers and consumers [nationwide]... Ms. Hochul has given the [Supreme Court] Justices another reason to take the case. Otherwise, the climate extortion by spendthrift progressive governments will never end. Similar bills have been proposed in other Democratic-run states including California, Maryland and Massachusetts. Americans used to call this taxation without representation.” – Editorial Board, WSJ from...
https://www.wsj.com/opinion/kathy-hochul-new-york-climate-superfund-taxes-10b132bb?mod=trending_now_opn_3
 
CHICAGO PMI (Investing.com)
“In a recent economic event, the Chicago Purchasing Managers' Index (PMI) reported a score of 36.9, suggesting a contraction in the manufacturing sector of the Chicago region. The PMI score of 36.9 is significantly lower than the forecasted 42.7, indicating a more severe contraction in the manufacturing sector than initially anticipated." Story at... 
https://www.investing.com/news/economic-indicators/chicago-pmi-dips-lower-than-expected-indicating-manufacturing-contraction-93CH-3791583
 
CAPE (CYCLICALLY ADJUSTED PE RATIO) SUGGESTS A CRASH IS COMING (msn)
“...the S&P 500's Shiller P/E is based on average inflation-adjusted earnings over the previous 10 years....

S&P 500 Shiller CAPE Ratio© YCharts
 
...On Dec. 24, the S&P 500's Shiller P/E Ratio closed at 38.35, which is within striking distance of its yearly high of almost 39. For added context, this is more than double its average reading of 17.19 over the last 154 years and represents the third-highest reading during a continuous bull market since January 1871... There have been only six occurrences of the Shiller P/E surpassing 30 during a bull market rally in 154 years, including the present, and all five prior instances saw the Dow Jones Industrial Average, S&P 500, and/or Nasdaq Composite eventually lose between 20% and 89% of their value.” Story at...
Is the Stock Market Going to Crash in 2025? 2 Historically Flawless Indicators Paint a Clear Picture.
My cmt: A crash is always coming; we just don’t know when. Further, the CAPE doesn’t predict when either. It’s not a good market timing indicator.
 
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Monday the S&P 500 declined about 1.1% to 5907.
-VIX rose about 9% to 17.40.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.533%.
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.  Added more 9/20.
 
SSO – added 12/20. (IRA acct.)
SPY – added 12/20. (IRA acct.)
QLD – added 12/20. (IRA acct.)
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 19 gave Bear-signs and 5 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.)
 

The daily Bull/Bear, 50-Indicator spread (Bull Indicators minus Bear Indicators, red curve in the chart above) remained -14 (14 more Bear indicators than Bull indicators) – same as Friday’s spread.
 
TODAY’S COMMENT
Repeating: The spread of -14 is better than the low of -18 at the 19 December S&P 500 low so I am not concerned. While we don’t like to see spreads fall after a bottom, it looks like there are enough indicators that are close to bullish, we could see a turn higher this week.
 
The 50-dMA of the S&P 500 is 5942. The Index dropped 0.6% below its 50-dMA Monday so that is a concern. The S&P 500 may test its 19 December low of 5867.  We may learn some new information if it does.
 
I’ve redrawn the short-term, lower trendline to incorporate the 19 December low. That puts Monday’s close at the lower trendline. Is today a bottom? We don’t know. We’ll have to watch the indicators.  
 
BOTTOM LINE

Since the 50-dMA has been violated we must be more concerned that declines may continue. We don't want to see the S&P 500 fall much further. 
 
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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained SELL, but for now, I won’t pay attention to this indicator. (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 70% stocks, including stock mutual funds and ETFs. 50% invested in stocks is a normal position. (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.