CPI … Business Optimism … New Home Sales … 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.
   
"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.”
 
“Stocks have run nicely to begin 2026. They should take a breather, but do not need one. Until proven otherwise, weakness should be bought. If small caps do not lead lower then I would contemplate buying even more which would be tough because our position size is so large” – Paul Schatz, President Heritage Capital.
 
BUSINESS OPTIMISM (Texas Boeder Business)
“The NFIB Small Business Optimism Index rose 0.5 points in December to 99.5 and remained above its 52-year average of 98…“2025 ended with a further increase in small business optimism,” said NFIB Chief Economist Bill Dunkelberg. “While Main Street business owners remain concerned about taxes, they anticipate favorable economic conditions in 2026 due to waning cost pressures, easing labor challenges, and an increase in capital investments.” Story at…
https://texasborderbusiness.com/small-business-optimism-up-in-latest-nfib-report/
 
CPI (Fox Business)
"The Bureau of Labor Statistics said on Tuesday that the consumer price index (CPI) – a broad measure of how much everyday goods like gasoline, groceries and rent cost – rose 0.3% on a monthly basis in December and held steady at 2.7% on a year-over-year basis…core prices, which exclude volatile measurements of gasoline and food to better assess price growth trends, were up 0.2% from the prior month and 2.6% from a year ago. Those figures were slightly below economists' expectations of 0.3% and 2.7%, respectively.” Story at…
https://www.foxbusiness.com/economy/cpi-inflation-december-2025
 
NEW HOME SALES (Census Bureau)
“Sales of new single-family houses in October 2025 were at a seasonally-adjusted annual rate of 737,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.1 percent (±14.2 percent) below the September 2025 rate of 738,000, and is 18.7 percent (±21.7 percent) above the October 2024 rate of 621,000.” Press release at…
https://www.census.gov/construction/nrs/current/index.html
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 declined about 0.2% to 6964.
-VIX rose about 6% to 15.98.
-The yield on the 10-year Treasury declined to 4.179% (compared to about this time prior market day).
 
MY TRADING POSITIONS
XLK – Added 11/26/2025 & 12/1/2025
SPY – Added 12/1/2025.
NVDA – Added a small position 12/1/2025.
SSO – Added 1/7/2026.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 2 gave Bear-signs and 20 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 +16 to +18 (18 more Bull indicators than Bear indicators), a BULLISH 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 higher, a BULLISH sign.
 
The below chart is from one of the 2 bearish indicators of the 50 indicators I follow. It is based on a Lowry Research, Buying-Pressure minus Selling-Pressure calculation, as best I can tell. I am not sure because I got the analysis method from descriptions on the internet and not from Lowry Research.  Their numbers are proprietary. The analysis shows buying-pressure slightly higher than selling-pressure, but since the trend of the 10-dMA (green curve) is down, this indicator is giving a bearish indication.  Since it is only one of two bear indicators, we can’t be worried.
 

 
BOTTOM LINE
I’m bullish and fully invested.
 
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 remained BUY. (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 60% stocks, including stock mutual funds and ETFs (although I should calculate this number). 50% invested in stocks is a normal, conservative position for a retiree. (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 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.