Unemployment Rate .... Payroll Report ... Sentiment ... 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.
 
“In his outrage over President Trump’s order to pause federal grants, Sen. Chuck Schumer protested that “virtually any organization, school, state, police office, county, town or community depends on federal grant money to run its day-to-day operations” (“The Spending Freeze Panic,” Review & Outlook, Jan. 30). That statement tells you all you need to know about the bloated federal government Sen. Schumer has helped build over four decades.” - Richard Brown, WSJ Letters to the editor at...
https://www.wsj.com/opinion/what-schumer-has-wrought-senator-new-york-spending-67d950f6?mod=letterstoeditor_article_pos9
 
TRUMP SAYS, “YOU’RE FIRED!” BUT WAIT – NOT SO FAST (The Hill)
“As president, [Trump] is threatening to cut 50,000 federal positions. There will be federal employees whom he replaces as part of the usual political turnover, and others whom he will fire as retribution for being disloyal. But when it comes to firing most federal employees, it isn’t as easy as it appears on television. Federal employees are protected by a system that upholds accountability and fairness — values that cannot be undermined for political gain...
...The federal civil service system exists to ensure that hiring and firing decisions are based on merit, not political favoritism... Before this system was established, many new administrations fired their predecessors’ civil servants and replaced them with donors and cronies. This practice led to instability and inefficiency within the federal government. To address this issue, Congress established merit-based hiring and firing procedures that apply to civil servants who are not political appointees, ensuring that government agencies are staffed with qualified individuals who can effectively serve the public.” Story at...
https://thehill.com/opinion/5107846-federal-employees-civil-service-system/
My cmt: Trump’s offer for employees to resign and be paid until the end of the Fiscal Year (September 30) is probably not legal either.  When I worked for DOD, the Agency had authority to offer a $25,000 buy-out to encourage employees to leave. The current offer would far exceed that amount. Congress holds the purse strings of the nation, not the President.
 
PAYROLL REPORT / UNEMPLOYMENT RATE (Yahoo Finance)
“Data from the Bureau of Labor Statistics released Friday showed the unemployment rate fell to 4% in January from 4.1% the month prior. The unemployment rate now sits at its lowest level since May 2024. The US economy created 143,000 new jobs in January, less than the 170,000 expected by economists...” Story at...
https://finance.yahoo.com/news/january-jobs-report-unemployment-rate-falls-to-4-wages-rise-more-than-forecast-as-us-labor-market-remains-resilient-to-start-2025-133442714.html
 
MICHIGAN SENTIMENT (Univ Michigan)
“Consumer sentiment fell for the second straight month, dropping about 5% to reach its lowest reading since July 2024. The decrease was pervasive, with Republicans, Independents, and Democrats all posting sentiment declines from January, along with consumers across age and wealth groups... Year-ahead inflation expectations jumped up from 3.3% last month to 4.3% this month, the highest reading since November 2023 and marking two consecutive months of unusually large increases. This is only the fifth time in 14 years we have seen such a large one-month rise (one percentage point or more) in year-ahead inflation expectations.” Report at...
http://www.sca.isr.umich.edu/
 
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Friday the S&P 500 fell about 1% to 6026.
-VIX rose about 7% to 16.54.
-The yield on the 10-year Treasury rose (compared to about this time, prior trading day) to 4.495%.
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.  Added more 9/20.
 
SSO – Sold 2/3. (IRA acct.)
SPY – Sold 2/3. (IRA acct.)
QLD – added 12/20. (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, 12 gave Bear-signs and 8 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 Bearish to Neutral -4 (4 more Bear indicators than Bull indicators). The 10-dMA of the spread is still falling, a bearish sign. From +9 to -4 was an unusually large reversal of -15 in the Bull/Bear spread.
 
This was a big drop in the indicators and today we note that Breadth indicators took a big hit. 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 I measure it in several ways. Another measure is the number of new-highs. You may remember that I cautioned about 2 weeks ago that the number of new 52-week highs at the S&P 500 all-time high was borderline low and almost issuing a warning that a greater than 10% correction was possible. It may have been close enough and today’s breadth numbers along with the new-highs is concerning.  The percentage of new, 52-week highs has continued to be weak over the last 2-weeks.
 
There was a Hindenburg Omen today.
Hindenburg Omen: (https://www.investopedia.com/terms/h/hindenburgomen.asp).
As we’ve noted before, the Omen sends a lot of false warnings. Further, the Fosback New-high/new-low Logic indicator uses a similar analytic approach, but it is closer to buy than sell, so I won’t get too worried about the Hindenburg signal at this point. 
 
Friday, unchanged volume was very high. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. Are markets turning back down? Perhaps, the best we can say is that investors are confused. “High-unchanged-volume” is not one of my indicators because it is often wrong.
 
We don’t know what next week will bring, but if indicators continue to fall, I’ll reduce stock holdings further.
 
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
 
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 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.