Richmond Fed … 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.”
 
“The Trump administration’s assault on Minnesota long ago stopped being a matter of immigration enforcement. It is a campaign of organized brutality against the people of our state. It isn’t just. It isn’t legal. And, critically, it isn’t making anyone any safer.” – Tim Waltz, Governor, Minnesota.
My cmt: There would have been a lot less trouble in Minnesota if the state had enforced laws against harassing Federal ICE members doing their jobs.  
 
“What is Reagan not remembered for? Deportations. He put his effort into legalizing people already here—nearly three million, the largest such legalization in U.S. history. He made a point of promoting and signing a law with increased enforcement powers but barely used them. He deported in eight years fewer people than President Obama did in six months. Reagan understood the purpose of prosecutorial discretion. America had failed so long and so consistently to enforce its own immigration laws or make them sensible. It owed better to those now here than to treat every undocumented grandmother and restaurant worker as the equivalent of a Tren de Aragua gangster.´- Holman W. Jenkins, Opinion Columnist, Business World, The Wall Street Journal. Commentary at…
https://www.wsj.com/opinion/trumps-regression-to-the-mean-011c8056?mod=opinion_lead_pos8
 
RICHMOND FED INDEX (Richmond FED)
“Fifth District manufacturing activity was mostly unchanged in January, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index inched up to −6 in January from −7 in December.” Report at…
https://www.richmondfed.org/region_communities/regional_data_analysis/business_surveys/manufacturing
 
DALLAS FED SERVICES (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
 
-Tuesday the S&P 500 rose about 0.4% to 6979.
-VIX rose about 1% to 16.35.
-The yield on the 10-year Treasury rose to 4.229% (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 remained +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 continued 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.
 
The S&P 500 has been up 5-days in a row. That’s a high number, but there have only been 12 up-days in the last month. That’s not enough to give a sell-signal. It looks like the markets can continue higher although the Index is due for a down-day.
 
It is up to price action now.  Can the S&P 500 break above the bearish ascending wedge? If not I’ll be worried. As I write this, futures are showing a bullish day is likely tomorrow. Further, the futures market is higher than that upper wedge line – a bullish sign.
 
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. I haven’t sold anything yet.
 
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 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. 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.