Business Optimism ... 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.
 
NFIB BUSINESS OPTIMISM (NFIB Optimism)
“The NFIB Small Business Optimism Index dipped 2.3 points in January following surges in November and December. Despite the setback, the index remains far above its prevailing level over the past three years.” Story at... 
https://www.fxstreet.com/analysis/small-business-optimism-falls-back-slightly-in-january-202502111516
 
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Tuesday the S&P 500 rose about 2pts to 6069.
-VIX rose about 1% to 16.02.
-The yield on the 10-year Treasury rose (compared to about this time, prior trading day) to 4.537%.
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.  Added more 9/20/2024.
QLD – added 12/20/2024. (IRA acct.)
NVDA – added 1/6/2025.
 
The decline in Nvidia appears to be overblown. Regarding competition to Nvidia, Dan Ives (Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities) says, “The threat is minimal.” He recommended buying Nvidia. I will hold NVDA and see what develops... 
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 11 gave Bear-signs and 9 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 to a Neutral -2 ( 2 more Bear indicators than Bull indicators). The 10-dMA of the spread is still falling, a bearish sign.
 
It’s not surprising that indicators slipped today given that the markets were down for much of the day. The S&P 500 is not too far above its 50-dMA and if the index drops below the 50-day, selling could pick up.
 
Breadth improved some today and that’s a bullish sign if it continues.
 
If indicators continue to fall, I’ll reduce stock holdings further. For now, I am on hold.
 
BOTTOM LINE
I am Neutral – 60% in stocks.
 
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
 
TUESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to HOLD. (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 60% 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.