MomentumOptions.com Pre-Market Update for 1/5/2026
Santa Rally Fizzles After First Day/ New Alert (HAL)!
The stock market posted a solid 2025 with the major indexes showing double-digit gains for the year. However, the major indexes were lower for the shortened holiday week. The official/ unofficial Santa Rally has one day of trading before the time period closes with the bears looking to ruin the enthusiasm despite Friday’s mostly higher closes.
The Nasdaq sat out the rebound after testing a low of 23,119 while ending at 23,235 (-0.03%). Key support at 23,000 held. Resistance is at 23,500.
The S&P 500 settled at 6,858 (+0.2%) with the peak at 6,894. Key resistance at 6,900 held. Support is at 6,850.
The Dow tagged a late day high of 48,404 before closing at 48,382 (+0.7%). Resistance at 48,500 easily held. Support is at 48,000.
Earnings and Economic News
Earnings
None – 4Q earnings season starts next week.
Economic News
ISM Manufacturing Index – 10:00am
Technical Outlook and Market Thoughts
For the week, the Nasdaq sank 1.5% and the S&P 500 dropped 1%. The Dow was down 0.7% and the Russell was off 1%. Year-to-date, the Nasdaq has slipped 0.3% and the S&P has added 0.2%. The Dow is higher by 0.7% and the Russell is lower by 1.1% for 2026.
For 2025, the Nasdaq zoomed 20.4%; the S&P surged 16.4%; the Dow rallied 13%; and the Russell jumped 11%.
The major indexes fell out of their v-shape recovery patterns last Monday and made lower lows throughout the week and into Friday’s open. The reversal afterwards and strength into the closing bell were slightly bullish after key support levels were breached and held.
The Russell 2000 avoided a lower low but peaked in mid-December and never established a full v-shape recovery. The peak off the pre-Thanksgiving low fizzled on December 22nd and was the first clue any Santa rally might struggle. Friday’s high hit 2,509. Resistance is at 2,525-2,550. A close above 2,575 would be more bullish and gets our October 8th Price Targets at 2,600-2,650 back in the mix with the December 12th all-time peak at 2,595.
Key support is at 2,475 and the 50-day moving average. Thursday’s and Friday’s lows tagged 2,481 and 2,480 and might suggest a near-term double bottom. If not, there is further downside risk to 2,425-2,375.
The Nasdaq hit a lower low of 23,119 with key support at 23,000 holding on the second-straight close below the 50-day moving average. Closes below the former gets a retest to 22,500-22,000 in play.
Resistance is at 23,500-23,750 with the December 10th peak at 23,704. Multiple closes above the latter levels gets 24,000 in focus with the October 29th record high at 24,019.
The S&P 500 kissed a low of 6,824 before reversing course. Support at 6,850 was cracked but held. Closes back below 6,800 and the 50-day moving average (6,805) would indicate a possible top with ongoing weakness down to 6,750-6,700.
Resistance is at 6,900-6,925. Closes above the latter and the December 26th lifetime high at 6,945 sets up a surge to 7,000-7,150 for the upcoming earnings season.
The Dow breached key support at 48,000 but a level that held for the second-straight session. Backup help is at 47,750-47,500 and the 50-day moving (47,576). Closes below 47,250 would indicate a possible near-term top.
Resistance is at 48,500-49,000 with the December 12th record peak at 48,886. Our Price Target from February 23rd, 2024 for the blue-chips remains at 50,000.
The Volatility Index (VIX) has been in an eight-session range between 13.50-15 following the December 19th close below the latter. There was stretch to the upside last week with Friday’s top at 15.42 but 15 holding in three of the past four sessions.
The 52-week low hit 13.38 on December 24th. We have been predicting further weakness down to 13.50-12.75 and one-year lows with the December 6th, 2024 low at 12.70. Our yearend homework showed the possibly of 12-11.50 possibly tripping in January, providing the market stays bullish.
Additional resistance is at 17-17.50 on multiple closes above 15. Once again, as a reminder, a market curveball can happen at any given time with closes above 17.50-20 being cautious signals for the market. We mentioned this to close out 2025 and given the heightened geopolitical events over the weekend, please keep this in mind.
Earnings season could also provide heightened, or lowered, volatility. A bubble, or an ongoing FOMO rally in the metals could also provide some epic moments.
The Financial sector kicks off the 4Q earnings action on January 13th. JPMorgan (JPM) will announce numbers before that Tuesday’s open with Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC) following up Wednesday morning.
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.
Futures are mostly in the green as we head to press this Sunday evening: Nasdaq futures are up 101 points; S&P 500 futures are popping a 12-pack; Dow futures are gaining 20 points; and the Russell futures are off a point.
Momentum Options Alerts Update
Closed Momentum Options Trades for 2025: 54-20 (73%, 17 triple-digit winners) / 2024: 77-17 (82%, 38 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.
New Alert!
Halliburton (HAL, $29.60, up $1.34)
Buy to Open: HAL February 32 calls
Expiration Date: February 20th, 2026
Current Option Price: 62 cents
Action: We like these call options at current levels and you can use a Limit Order up to 80 cents to get the best fills on this morning’s open. These are the regular HAL February 32 calls that expire on February 20th, 2026 (46 days).
Note: If the calls open above 80 cents, VOID the setup. We will provide an update shortly after the open. We normally issue market alerts during market hours but this could be a special situation.
Current Alerts
AT&T (T, $24.56, down $0.28)
Option: T February 26 calls
Expiration Date: February 20th, 2026
Entry Option Price: $0.35 (12/24/2025)
Current Option Price: $0.30
Exit Target: $0.70
Return: -14%
Stop Target: None
Action: Key support at $24.50 held on the session low. Resistance is at $24.75-$25. Earnings are due out January 28th.