Dow Clears 50,000 on Snapback Rally
The stock market bounced back from heavy losses throughout the week after rebounding off key support levels on Thursday following Friday’s gains. The major indexes were mixed for the week but kept all-time highs in play as the blue-chips cleared another key milestone.
The Nasdaq finished at 23,031 (2.2%) after testing a high of 23,088. Key resistance at 23,000 was reclaimed. Support is at 22,500.
The S&P 500 peaked at 6,944 while settling at 6,932 (2%). Resistance at 6,925 was recovered. Support is at 6,900.
The Dow closed at at lifetime high of 50,115 (2.5%) with the top at 50,169. Undefined resistance at 50,000 was cleared and held. Support is at 49,000.
Earnings and Economic News
Before the open: Cleveland-Cliffs (CLF)
After the close: Amkor Technology (AMKR), Goodyear Tire & Rubber (GT), onsemi (ON)
Economic News
None – but plenty of Fed speak throughout the day
Technical Outlook and Market Thoughts
For the week, the Nasdaq sank 1.8% and the S&P 500 slipped 0.1%. The Dow rallied 2.5% while the Russell surged 2.2%. Year-to-date, the Nasdaq has fallen 0.9% and the S&P has advanced 1.3%. The Dow is up 4.3% and the Russell has zoomed 8% for 2026.
The Dow broke out of a 23-session and 1,100 point range since January 5th following Friday’s surge to 50,169. Undefined resistance and our Price Target from February 23rd, 2024 at 50,000 was cleared and held. There is momentum to 50,500-51,500 with the former representing our stretch target from January 9th.
Fresh support is at 49,600. Closes below 48,500 and the 50-day moving average (48,616) would be a slightly bearish development with additional risk down to 48,000-47,750.
The Nasdaq held backup and crucial support at 22,500 on Thursday’s ongoing fade to 22,461. We mentioned coming into last week that multiple closes below 23,000 would still confirm a possible top and Friday’s rebound saved the bulls as the Wednesday and Thursday closes were below this level. At 22,000, an 8% pullback would occur with the November 21st low at 21,898. This was a 9% drawdown from the previous October 29th record top at 24,019 with 21,500 being a 10% selloff from that record high and the January 28th high at 23,988.
Resistance is at 23,250-23,500 and the 50-day moving average. There is stretch up to 24,500, maybe 25,000, on a breakout above the double-top peaks from January and October. With last week’s losses, the index is now down for the year.
The Russell 2000 held backup support from early January at 2,575 and the 50-day moving average on Thursday’s intraday slide to 2,569. We have been saying closes below 2,575-2,550 could be signs of a near-term top with additional weakness to 2,500-2,475.
Resistance is at 2,675-2,700. 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. The January 22nd record peak is at 2,735. If both of these levels are cleared again, there could be near-term upside to 2,750-2,800.
The S&P 500 has basically been in a 33-session range between 6,800-7,000 following the snapback rally and close back above 6,925. There could be another run to psychological resistance at 7,000 this week with the prior Wednesday’s record high at 7,002. Multiple closes above 7,000 could lead to a breakout up to 7,150.
Support is at 6,850 and the 50-day moving average with multiple closes below 6,800 and the bottom of the range being a bearish development.
The S&P 500 Volatility Index (VIX) remains in a symmetrical triangle with the top of the downtrend channel off the November 20th peak at 28.27 and Thursday’s peak at 23.10 and one day close above 20. Support remains at 16.50-16. Closes below 15 are likely needed to keep all-time highs in play for the other major indexes.
Last week we listed key support levels at: Nasdaq 23,250-23,000; S&P 6,850-6,800; Dow 48,500-48,000; and Russell 2,600-2,575. That is the case again for this week. We have also been warning for months if lower levels of support start to crack across the board, February (and March) could look a little like last year’s price action.
The February monthly options have 11 days before expiration on Monday’s open and the March monthly options will have 39 days. We like to give directional alerts 4-7 weeks to play out so we are still targeting the March monthly options and April calls and puts for our directional alerts. April options have 67 days before expiration.
Futures are pointing towards a higher open for Monday. Dow futures are up 78 points; Nasdaq futures are higher by 37 points; S&P futures are popping 8 points; and Russell futures are edging up 4 points.
Momentum Options Alerts Update
Closed Momentum Options Trades for 2026: 5-1 (83%, 2 triple-digit winners); 2025: 55-20 (73%, 17 triple-digit winners); 2024: 77-17 (82%, 38 triple-digit winners); 2023: 34-11 (76%, 8 triple-digit winners). Overall: 171-49 (78% win rate) 65 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.
Keurig Dr Pepper (KDP, $28.41, up $0.40)
Option: KDP March 26 puts
Expiration Date: March 20th, 2026
Entry Option Price: $0.35 (2/5/2026)
Current Option Price: $0.35
Exit Target: $0.70
Return: 0%
Stop Target: None
Action: Lower resistance at $28.25-$28.50 was cleared and held following Friday’s pop to $28.44. Support is at $28-$27.75 and the 50-day moving average.
We like this alert as long as $30 hold. We would like to see a move below $27 this week.
LegalZoom (LZ, $8.05, up $0.24)
Option: LZ March 11 calls
Expiration Date: March 20th, 2026
Entry Option Price: $0.30 (2/2/2026)
Current Option Price: $0.20
Exit Target: $0.60
Return: -33%
Stop Target: None
Action: Fresh and lower resistance at $8-$8.25 was cleared and held with the high at $8.08. Support is at $7.75-$7.50.
KeyCorp (KEY, $23.17, up $0.46)
Option: KEY March 23 calls
Expiration Date: March 20th, 2026
Entry Option Price: $0.35 (1/22/2026)
Current Option Price: $0.85 (closed half at $0.85 on 2/6)
Exit Target: $0.70, raise to $1.05
Return: 143%
Stop Target: 45 cents, raise to 60 cents (Stop Limit)
Action: Raise the Stop Limit at 45 cents to 60 cents. This will lock-in a third-triple-digit winner to start 2026.
Friday’s peak reached $23.29 with our upper price target at $22.50-$24 holding. Support is at $23-$22.75
We have a mid-March price target of $24 for the stock. If reached, the calls will be at least $1.00 in-the-money. If shares pull back and drop below $22.50, the Stop Limit will likely trip on the other half.
