Fourth-Quarter Earnings Season Heats Up
The stock market was mostly lower last week with the exception of the small-caps as they rallied for the second-straight week. The Financial sector got the fourth-quarter earnings season started with mixed results and the action heating up over the next few weeks.
The Nasdaq tagged a low of 23,446 before ending at 23,515 (-0.06%). Key support at 23,500 held. Resistance is at 23,750.
The S&P 500 settled at 6,940 (-0.06%) after trading down to 6,925. Crucial support at 6,925 was kissed and held. Resistance is at 6,975.
The Dow pulled back to 49,246 while finishing at 49,359 (-0.2%). Current support at 49,000 held. Resistance is at 49,600.
Earnings and Economic News
(for Tuesday):
Before the open: 3M (MMM), D.R. Horton (DHI), Fastenal (FAST)
After the close: Interactive Brokers Group (IBKR), Netflix (NFLX), United Airlines (UAL)
Economic News
None
Technical Outlook and Market Thoughts
For the week, the Nasdaq slipped 0.7% and the S&P 500 dipped 0.4%. The Dow gave back 0.3% while the Russell rallied 2%. Year-to-date, the Nasdaq has gained 1.2% and the S&P has advanced 1.4%. The Dow is up 2.7% and the Russell has rallied a quick 8% for 2026.
The biggest news and mostly uncovered by the talking heads is the 8% surge we just mentioned for the Russell 2000. We have been highlighting the January 2nd and December 31st lows being a near-term double bottom, with the small-caps trading down to 2,481 and 2,480, respectively. Friday’s all-time lifetime peak reached 2,692 with the close at 2,677.
Our October 8th Price Targets were at 2,600-2,650 and we predicted possible “stretch” up to 2,700 for the index on January 9th. There could ongoing stretch up to 2,725-2,750 but this index is in overbought territory as RSI (relative strength index) closed above 71 on Friday. Last September and July, RSI cleared 70 and there was an immediate pullback.
New and rising support is at 2,650-2,600. A close below 2,575 would suggest a near-term top with additional weakness to 2,525.
The Nasdaq reached a low of 23,306 on Wednesday with crucial support at 23,250 holding. Closes below this level and the 50-day moving average would likely indicate weakness to 23,000-22,750.
Resistance is at 23,750 with last Tuesday’s peak at 23,813. Multiple closes above these levels gets 24,000 back in play with the October 29th all-time top at 24,019.
The S&P 500 held major support at 6,925 by a point on Wednesday’s trip down to 6,885. Backup help is at 6,850 and the 50-day moving average (6,829). Closes below these levels would also imply a possible top.
Undefined and psychological resistance remains at 7,000. Closes above this level could lead to a breakout towards 7,100-7,150.
The Dow has basically been in a nine-session trading range between 49,000 and 49,600. A drop below support at 49,000 gets backup help at 48,500-48,000 and the 50-day moving average back on the map.
Last Monday’s record high at 49,633 came within spitting distance of our Price Target from February 23rd, 2024 at 50,000 for the blue-chips. We said there could be fluff up to 51,000 on a bullish earnings season and we should know by month’s end if both targets trip.
The S&P 500 Volatility Index (VIX) made another MAJOR reversal after soaring to a high of 18.10 midweek. The December 17th high at 18 was taken out but key resistance at 17.50 and the 50-day moving average held into the closing bell. Closes above these levels would be a yellow light with risk up to 20. Closes above 20 will likely lead to extreme selling pressure in the market.
Key support is at 15. Closes back below this level keeps all-time highs in the mix for the major indexes. The 200-day moving average is rolling over (slightly bullish) and could, just maybe, be on track to fall below the 50-day moving average.
The Financial sector got the 4Q earnings rolling with Netflix (NFLX) ramping up this week’s busy schedule after Tuesday’s closing bell following. The market is closed on Monday for a holiday.
Halliburton (HAL), Johnson & Johnson (JNJ) and Charles Schwab (SCHW) highlight Wednesday’s action. Thursday’s busy session includes earnings updates from Alcoa (AA), Intel (INTC) and Capital One (COF). Economic news will also be heavy on that day. Ahead of Friday’s open, Booz Allen (BAH) will be in the spotlight.
Once again, and as a reminder, we have been highlighting since early October, nice round numbers coming into play for the major indexes: Dow 50,000; Nasdaq 25,000; S&P 7,000-7,150; and Russell 2,650-2,700. These next few weeks will likely determine if they are cracked, or even still on the radar.
The February monthly options have 31 days before expiration as of Tuesday’s open and the March monthly options will have 59 days. We like to give directional alerts 4-7 weeks to play out and these are the monthly options we will be targeting.
Momentum Options Alerts Update for 1/15/2026
Closed Momentum Options Trades for 2026: 1-0 (100%); 2025: 54-20 (73%, 17 triple-digit winners); 2024: 77-17 (82%, 38 triple-digit winners). Overall: 167-58 (78% win rate) 63 triple-digit winners. Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Stops” entered to close any alerts or “Limit Orders” in your brokerage account unless we list one. We will send out an “Alert” or “New Alert” if we want you to close a position or if a new position comes out. Otherwise, follow instructions at all times in the updates on Monday’s and Thursday’s along with Text Alerts and videos throughout the week.
Match Group (MTCH, $31.34, down $0.27)
Option: MTCH February 27.50 puts
Expiration Date: February 20th, 2026
Entry Option Price: $0.40 (1/13/2026)
Current Option Price: $0.45
Exit Target: $0.80
Return: 13%
Stop Target: None
Action: Friday’s low kissed $31.19 with key support at $31.50 failing to hold. Lowered resistance is at $31.75-$32.
We have a Price Target zone of $27.50-$25 based on continued closes below $31 on a technical level AND a possible earnings miss when the company reports in early February.
Goodyear Tire & Rubber (GT, $9.09, down $0.23)
Option: GT February 10 calls
Expiration Date: February 20th, 2026
Entry Option Price: $0.35 (1/6/2026)
Current Option Price: $0.40
Exit Target: $0.70
Return: 14%
Stop Target: None
Action: Upper support at $9-$8.75 was tripped but held following the dip to $8.93. Earnings are due out February 5th. Resistance remains at $9.25 and the 200-day moving average. Closes above these levels gets $10 in play.
We said if shares fell below $8.75 last week, or this week, to EXIT the alert. Raise that to $8.90. We are still looking for a breakout ahead of earnings but we don’t mind moving to the sidelines if the technical outlook weakens. Also, if tripped, we can look to get back in on a solid move above $9.50 and the 200-day moving average. The current range could continue into the announcement and start to erode premium.
NOTE: We do not carry stop limits on options under 50 cents as scalpers can easily take you out of a position. We DO list stop limits when an alert is up 50% or more but it’s best just to exit an alert if the technical outlook changes. Again, exit the alert for a scratch or slight profit if shares fall below $8.90 this week.
AT&T (T, $23.49, down $0.24)
Option: T February 26 calls
Expiration Date: February 20th, 2026
Entry Option Price: $0.35 (12/24/2025)
Current Option Price: $0.11
Exit Target: $0.70
Return: -69%
Stop Target: None
Action: A dividend was paid last week that has caused some of the weakness in the stock but we mentioned the solid close below $24 was slightly bearish. This level is now key resistance.
New support is at $23.25-$23. We said a move below $23.50 could lead to $22-$21.50 and fresh 52-week lows. We also said for T, if shares fell below $23 last week, or this week, would could exit.
We do like the fact the 50-day MA is leveling out and the fact the company has topped earnings forecasts the past five quarters. However, revenue missed in two of them. Continue to hold, for now.
