ISM Manufacturing … 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.”
 
3^RD HISTORIC TRUMP STOCK MARKET CRASH IMMINENT? (Motley Fool)
“One of the historical markers that doesn't bode particularly well for Wall Street is its expensive valuation, as measured by the S&P 500's Shiller Price-to-Earnings (P/E) Ratio, which is also known as the cyclically adjusted P/E Ratio, or CAPE Ratio.
 

When back-tested to January 1871, this valuation tool, which is based on average inflation-adjusted earnings over the trailing decade, has averaged 17.33. As of the closing bell on Jan. 28, the CAPE Ratio clocked in above 41. This is the second-priciest stock market in history…Although it's impossible to predict how long valuations will remain extended, the Shiller P/E has an exceptional track record of foreshadowing significant declines. The CAPE Ratio has only exceeded 30 on six occasions in 155 years, with the previous five instances followed by drops in the Dow, S&P 500, and/or Nasdaq ranging from 20% to 89%.” Story at…
Is a 3rd historic stock market crash imminent under President Donald Trump? Here's what the data says.
 
ISM MANUFACTURING (ISM)
“Economic activity in the manufacturing sector expanded in January for the first time in 12 months, preceded by 26 straight months of contraction, say the nation's supply executives in the latest ISM^® Manufacturing PMI^® Report…"The Manufacturing PMI^® registered 52.6 percent in January, a 4.7-percentage point increase compared to the seasonally adjusted reading of 47.9 percent in December.” Press release at…
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-52-6-january-2026-ism-manufacturing-pmi-report-302675443.html
 
-Monday the S&P 500 rose about 0.5% to 6976.
-VIX declined about 6% to 16.36.
-The yield on the 10-year Treasury rose to 4.281% (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.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 7 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 improved from +1 to +8 (1 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.
 
Breadth had been falling, but it improved today and over the last 2 weeks, more issues on the NYSE have gone up than have gone down.
 
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. If it doesn’t happen before the S&P 500 reaches the termination of the wedge where the upper and lower trend lines meet a breakdown is likely. 
 
BOTTOM LINE
I’m cautiously 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 improved 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 70% 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.