National Activity Index … Durable Goods … Dallas Fed … 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.”
 
NATIONAL ACTIVITY INDEX (Advisor Perspectives)
“The Chicago Fed National Activity Index (CFNAI) rose to -0.04 in November from -0.42 in October. Three of the four broad categories of indicators used to construct the index increased from October, but three categories made negative contributions in November.”

Commentary and charts at…
https://www.advisorperspectives.com/dshort/updates/2026/01/26/chicago-fed-national-activity-index-cfnai-economic-growth-increased-november-2025
 
DURABLE GOODS (Marketplace.org)
“Durable goods orders for November were released Monday, after a government shutdown delayed the Census Bureau report… New durable goods orders shot up more than 5%, after falling in October. You can chalk a lot of that up to a surge in bookings for new planes from Boeing.” Story at… 
https://www.marketplace.org/story/2026/01/26/why-durable-goods-orders-were-up-5-in-november
 
DALLAS FED MANUFACTURING INDEX (Dallas Fed)
“Texas factory activity expanded solidly in January after contracting in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, jumped to 11.2 from -3.0, a reading suggestive of an above-average pace of output expansion.” Report at…
https://www.dallasfed.org/research/surveys/tmos/2026/2601
 
-Monday the S&P 500 rose about 0.5% to 6950.
-VIX rose about 0.4% to 16.15. (VIX had fallen earlier in the day, but turned higher around 2pm.)
-The yield on the 10-year Treasury declined to 4.213% (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; Increased the position 1/21/2026
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 6 gave Bear-signs and 15 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 from +12 to +9 (9 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 reversed down, a BEARISH sign.
 
We still have the bearish rising wedge on the chart.  I’ve shown it in red. The top of the rising wedge on the above chart is around 7,000. We need to see the S&P 500 break above that level to feel better about markets. That will be an important test.
 
I updated my investment percentages over the weekend. My previous estimate wasn’t very good.  The stocks have been doing well (pushing my stock percentage higher) and I have been increasing stock % recently. I am now 80% invested with 18% Bonds and only 2% in cash. This is a very aggressive position for a retiree. It’s perfectly ok for someone 20-30 years old. They have plenty of time to make up losses, but retirees don’t. Retirees must be cautious and avoid losses. With that in mind, I will be taking some profits when the S&P 500 hits the upper trend line of the bearish rising wedge formation. If the Index tracks higher, I can always reset positions.
 
It’s never wrong to take profits.
 
The Fed meeting wraps up Wednesday, 28 January. According to CME Group’s Fed Watch, there is a 96% chance that rates will remain unchanged. But, there can still be some market angst around the press conference after the meeting.
 
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
 

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals declined to HOLD. (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 80% stocks, including stock mutual funds and ETFs (although I need to re-calculate this number). 50% invested in stocks is a normal, conservative position for a retiree. (80% 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.