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

 

“Bad medicine” – Michael Ramirez, political commentary at...
https://michaelpramirez.com/index.html
 
“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.
 
“Ms. Noonan [“Trump and the Collapse of the Old Order”] has expressed concern about the chaos of a second Trump term. But for those who have spent time in the tech industry, the disruption looks familiar and doesn’t cause unease. An old saying among entrepreneurs is to “move fast and break things,” and that’s exactly what Mr. Trump and his team are doing... Some things will break, but there will be broad consensus around what should be fixed. Meanwhile, we’ll discover that a lot of the time and money the government has been spending can be discontinued without any great loss. - John Foster, WSJ Letters at...
https://www.wsj.com/opinion/the-collapse-of-the-old-order-predated-trump-biden-obama-whtite-house-d59b802a?mod=letterstoeditor_article_pos7
 
"If a judge tried to tell a general how to conduct a military operation, that would be illegal. If a judge tried to command the attorney general in how to use her discretion as a prosecutor, that’s also illegal. Judges aren’t allowed to control the executive’s legitimate power." JD Vance, VP.
My cmt: Mr. Vance better read the Constitution.
 
WHAT TO DO ABOUT THE STOCK MARKET’S GIANT PROBLEM (WSJ)
“More than half the S&P 500’s 25% total return last year came from only a few companies, the so-called Magnificent Seven: Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. Nvidia alone, with its 171.2% return, produced more than one-fifth of the entire market’s gain in 2024. But such dominance by a handful of companies isn’t unusual...
...What investors should worry about, though, is overvaluation. The S&P 500 is trading at about 22 times what analysts expect its constituent companies to earn over the next 12 months. That’s far above its average, since 1990, of 16.4 times expected earnings, according to Strategas Research Partners... putting most of your money in stocks when you’re young makes sense... If you’re in or near retirement, though, you no longer have decades of paychecks in front of you, and your human capital has lost its power as a hedge.
Treasury inflation-protected securities, or TIPS, are an ideal way to cushion your wealth against the risk of a stock-market decline and the corrosive effects of inflation. I’ve bought them, and I think you should, too—now more than ever.” Jason Zweig, WSJ column at...
https://www.wsj.com/finance/investing/what-you-should-do-about-the-stock-markets-giant-problem-f4ca338e
My cmt: That’s one way to do it. I’d prefer to invest more heavily in stocks with the expectation that my indicators will warn of stock downturns in advance. The caveat (and risk) is that a sudden black-swan event might cause a big drop in stocks with little or no warning.
 
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Monday the S&P 500 rose about 0.7% to 6066.
-VIX declined about 4% to 15.81.
-The yield on the 10-year Treasury rose (compared to about this time, prior trading day) to 4.501%.
 
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, 10 gave Bear-signs and 10 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 McClellan Oscillator turned positive today and that cancels the Hindenburg Omen we saw Friday.
 
Once again, we saw more high, unchanged-volume. As I’ve often said, many believe that this indicator suggests a market turning point because investors are confused. Are markets turning back down? Perhaps, but the best we can say is that investors are confused. “High-unchanged-volume” is not one of my indicators because it is often wrong.
 
The daily, bull-bear spread of 50-indicators improved to a Neutral zero (Bear indicators equal to Bull indicators). The 10-dMA of the spread is still falling, a bearish sign.
 
We note that Breadth indicators remained weak again today. On both a ten- and fifty-day basis, the percentage of issues advancing on the NYSE is below 50% - most issues have been going down over those time frames.  Breadth is probably the single most important indicator and we’ll need to watch indicators closely.
 
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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained SELL. (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.