DOW Friday Closing Price - 48710
SPX Friday Closing Price - 6929
NASDAQ Friday Closing Price - 25644
RUT Friday Closing Price - 2539

The bulls have won the show for the year, given that the economic reports have shown continued and positive economic growth. For the past 48 months (Trump's presidency), the DOW has rallied 8.8%, the SPX has rallied 12%, the NASDAQ has rallied 15.1% and the RUT has rallied 9%. On the negative side of it all, Gold has rallied 39% and the Dollar has dropped 8.8% in value, meaning that things are not all that positive. Fears of inflation rule over the market and the weakness in the Dollar (versus the EURO that has rallied 12% over this same time frame) also shows that confidence in the U.S. (as the strongest nation economically) has dropped world-wide.

This week is the beginning of the new year (2026) and though the bulls did make a statement this past week with the SPX making new all-time highs across the board, it is clearly-evident that the confidence in this continuing, is not there.

Seasonally, January is an up month and with the new all-time highs made by the SPX, it is evident that for the new high to be seen as a top (short-term or otherwise), a successful retest of the new high will need to be made before the index heads lower (unless some negative catalytic news comes out - unlikely). In addition, the index will be closing out the year, the month, and the week near the high of each, suggesting that further upside in all is likely to be seen in January. This all suggests that January is not likely to see any highly indicative selling interest. Having said that, February has been a down month on many different occasions and given what is happening, I do expect February to be a down month and perhaps of consequence.

Having said all of the above, here are the chart levels to look at. The key index will continue to be the SPX and in that index, it is likely that last week's high (which was also the monthly/yearly high) at 6945 will be broken not only at the beginning of the week but also at the beginning of the month (either on Friday or the week after). It is interesting to note something that came out from J.P. Morgan a few weeks ago that explains what is happening better than I can. The statement was: "One of the biggest contrasts this year has been the widening gap between Main Street and Wall Street. Wage growth has cooled (the Atlanta Federal Reserve's tracker is around 4% lately), sentiment has slid (the Michigan Consumer Sentiment Index is at 53.6 in October, down from 70.5 a year ago), while S&P 500 earnings and margins have marched higher (blended net margin is about 12.9% in Q3, above the five-year average). Hence the cliché: Markets are not the economy". Upside target (according to many economists) is between 7100 and 7500 and it is certainly possible that the lower number could be seen in January.

The DOW and the NASDAQ also will be closing on (or near) the high for the year/month, suggesting that they too will be going above those highs in January. In the DOW that will be above 48886 (both yearly and monthly the same level) and in the NAZ that will be above 26182 and 25882. The NASDAQ though, could go above last month's high but not above last year's high, and given that yearly charts are rarely used by chartists/computers/algorithms, it could be indicative given that normally the NASDAQ is the leader in a bull market. As such, the 26132 level does have some indicative meaning, especially if it goes above 25882, fails to break above 26132 and then in February goes below January's low (whatever that may be). Such action would likely be indicative of whether a top is found to the uptrend or whether it is a temporary top to the rally.

For the sake of information (but not likely to occur in January unless some fundamental negative catalyst occurs), here are the chart levels of support which is broken in January would be a short-term game changer to the outlook stated above. In the SPX pivotal intraweek support is found at 6720 and in the NASDAQ, it is found at 24921. The DOW has some (but minor) support at 47849, but this index is not indicative.

Anyhow, very few changes are likely to happen in January but there are quite a few important economic reports due out, which if "way-out of line" could change things. On Monday Jan 5th, the ISM manufacturing index comes out and on Friday the 9th, the Jobs report comes out. On Tuesday Jan 13th, CPI inflation comes out and the day after, Retail Sales and PPI come out. Then on Wednesday January 27th, the Fed meets to decide on the interest rate decision. Earnings reports start coming out on January 13th with the financial stocks reporting first. NFLX reports on the 20th and then the big 5 tech companies (AAPL, AMZN, GOOGL, META and MSFT) report on the last week of the month. NVDA does not report earnings until February.

That is about it for now!

HSI index had a short week (2 1/2 days of trading) and generated a very small trading range where no signals were given. The index did close very slightly in the lower half of the week's 270 point trading range, suggesting a slightly high chance of going below last week's low at 25674 than going above last week's high at 25944. Chart levels to watch on a daily closing basis are 25974 and 25434. Neither is pivotal but they would be slightly indicative. Pivotal daily close levels are 26033 and 25234. Neither are likely in play this week.

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GOLD(Feb 2026 chart) generated a strong up week having moved up $214 from low to high and closing $176 above the previous all-time weekly closing high. Gold closed near the high of the week and further upside above last week's high at $4583 is expected to be seen this week. The last time Gold broke above a new all-time weekly closing high, it rallied 17% (15% is a normal chart rally above a previous all-time weekly closing high). If Gold rallies 15% above the previous all-time weekly closing high at $4197, the $4820 level would be the objective. On a "daily" closing basis, the previous all-time high is $4397, meaning that is now support.

OIL generated a green weekly close, but it was only by $.41 cents, and it did close on the low of the week, suggesting further downside below last week's low at 56.52 will be seen this week. The bulls did try to rally Oil during the week, and they did have some success on the daily closing chart (they negated the break of pivotal daily close support) but when they failed on the weekly closing chart on Friday, they also negated the failure signal given on the daily closing chart (having given up $1.64 back of the weekly gains seen early in the week. The weekly close on Friday at 56.93 is still below the previous low weekly close support at 57.54 (which was broken the previous week), meaning that indicative break has now been confirmed. The previous week, Oil did break the intraweek support at 55.12 with a low at 54.89, but with the failure of the bulls to accomplish anything, the downside target of $52 remains viable.

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