Bulls Pushing Fresh Highs Ahead of Earnings Season
The stock market showed ongoing strength to start 2026 as the Santa Rally lifted the blue-chips and small-caps to slight gains. The broader market and Tech followed suit by pushing higher highs than the December 23rd closes a few days later. This helped get the overall rally to full speed ahead of this week’s start of the fourth-quarter earnings season.
The Nasdaq closed at 23,671 (+0.8%) after tagging an intraday high of 23,721. Key resistance at 23,750 held. Crucial support is at 23,500.
The S&P 500 hit a peak of 6,978 while ending at 6,966 (+0.7%). Undefined resistance at 7,000 held. Support is at 6,900.
The Dow settled at 49,504 (+0.7%) with the afternoon high reaching 49,571. Current and lower resistance at 49,500-50,000 was cleared and held. Support is at 49,000.
Earnings and Economic News
Before the open: Sify Technologies (SIFY)
After the close: Wealthhound (WLTH)
Economic News
None
Technical Outlook and Market Thoughts
For the week, the Nasdaq jumped 1.9% and the S&P 500 rallied 1.6%. The Dow soared 2.3% and the Russell zoomed 4.6%. Year-to-date, the Nasdaq and the S&P have added 1.8%. The Dow is higher by 3% and the Russell has gained nearly 5% for 2026.
Excluding the Nasdaq, the major indexes made higher highs for the month while also topping their previous December peaks. We mentioned the previous Friday’s action from January 2nd may have also been a near-term bottom, especially after the small-caps traded down to 2,480 and 2,481 in back-to-back sessions.
Speaking of which, the Russell 2000 made an intraday push to 2,635 and a fresh record high while settling at 2,624 (+0.8%). Fresh and lower resistance at 2,625-2,650 was cleared but held by less than a point. Our October 8th Price Targets at 2,600-2,650 remain in focus and we have talked about stretch up to 2,700 for the index.
New and rising support is at 2,600-2,550. A close below 2,525 would suggest a near-term top.
The Nasdaq reached a peak of 23,721 but missed clearing Wednesday’s high at 23,723. Key resistance at 23,500 was recovered. Multiple closes above 23,750 levels gets 24,000 back in the mix with the October 29th record high at 24,019.
Support is at 23,250-23,000. Closes below the latter and the 50-day moving average would likely indicate weakness to 22,500.
The S&P 500 hovered around 6,925 throughout the week with this level now trying to hold as fresh support. Backup help is at 6,900-6,850. Closes back below 6,800 and the 50-day moving average (6,818) would indicate a possible top.
Undefined and psychological resistance is at 7,000. Closes above this level could get stretch up to 7,100-7,150 in the picture.
The Dow’s surge above key and prior resistance at 48,500 to start last week was a bullish signal for the overall market. Wednesday’s record peak at 48,886 came close to our Price Target from February 23rd, 2024 of 50,000 for the blue-chips. There could be fluff up to 51,000 on a bullish earnings season.
New and rising support is at 49,250-49,000. Additional layers of support are at 48,750-48,500.
The S&P 500 Volatility Index (VIX) made a MAJOR reversal after sinking to a low of 14.43. The VIX had been in an uptrend since the December 23rd low at 13.38. The close below 14.50 keeps the possibility of fresh 52-week lows during earnings season. Our yearend homework showed the possibly of 12-11.50 possibly tripping in January, providing the market stays bullish.
Thursday’s and Friday’s peaks were at 15.85 and 15.81, respectively. Resistance is at 16-17.50. Closes above the latter and the 50-day moving average would be a yellow light for the market.
The Financial sector kicks off the 4Q earnings action this week with JPMorgan (JPM) announcing numbers before Tuesday’s open. Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC) will report numbers on Wednesday morning.
Once again, and as a reminder, we have also 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 levels could trip at some point in January, or during the first quarter, if key support levels hold again this week and higher highs are made.
Side Note: Shares of Rocket Companies (RKT) zoomed 9% Monday. We closed the February 22 calls at yearend for a slight profit. Those calls closed at $2.53 on Friday. We likely won’t chase the stock, or options, but it made the move we finally expected.
The February monthly options have 39 days before expiration and the March monthly options have 67 days. We like to give directional alerts 4-7 weeks to play out. On that note, we could have a 1-2 New Alerts this week, and as early as this morning’s open. However, we need to see how the market responds to a criminal investigation on the Fed chair, Powell, and breaking news that could impact the open.
Alerts Update
Goodyear Tire & Rubber (GT, $9.23, up $0.07)
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: Key resistance at $9.25 and the 200-day moving average held with the peak at $9.26. Closes above these levels gets $10 in play. Support is at $9-$8.75. Earnings are due out February 5th.
These calls options had unusual options activity of 19,000 contracts last Tuesday. This is indicating traders are following our December 24th lead for a near-term run to $10 as we also have a covered call Alert that is currently in play.
Snap (SNAP, $8.21, down $0.19)
Option: SNAP March 10 calls
Expiration Date: March 20th, 2026
Entry Option Price: $0.44 (1/6/2026)
Current Option Price: $0.42
Exit Target: $0.90
Return: 2%
Stop Target: 45 cents (Stop Limit)
Action: The Stop Limit at 45 cents tripped on Friday.
Resistance at $9 held on Wednesday’s pop to $9.07. We could reenter this alert with February or March calls if shares make another move above $9 and continue to hold the 200-day moving average this week. We could also decide back in SNAP as a covered call, as well.
AT&T (T, $23.99, down $0.18)
Option: T February 26 calls
Expiration Date: February 20th, 2026
Entry Option Price: $0.35 (12/24/2025)
Current Option Price: $0.15
Exit Target: $0.70
Return: -57%
Stop Target: None
Action: Key support at $24 failed to hold with the session low at $23.98. A move below $23.50 could lead to $22-$21.50 and fresh 52-week lows. Resistance is at $24.75-$25. Earnings are due out January 28th.
There was very unusual options volume in AT&T Friday as 515,768 calls traded versus 14,465 puts. This could be foreshadowing major news. Continue to hold.
