Another Week of Alternating Gains and Losses

U.S. stock indexes gave up much of the ground they had gained the previous week, extending a pattern of alternating gains and losses that has characterized early 2026. The Nasdaq declined 0.9% and the S&P 500 slipped 0.4%.

January’s modestly positive momentum didn’t extend into February for the S&P 500 and the Nasdaq, as both indexes finished the month in negative territory, with the former down 0.9% and the latter 3.3% lower. In contrast, the Dow eked out a 0.2% gain, extending its string of positive months to 10 in a row.

Bond Yields Drop to Four-Month Lows

Prices of government bonds rose on Friday, sending yields lower, to cap a month of strong fixed-income performance. The yield of the 10-year Treasury fell to the lowest level in more than four months, finishing around 3.96% on Friday. At the end of January, the yield was 4.26%.

Sector Rotation Continues

Two months into 2026, U.S. equity sectors that trailed the broader market last year have moved up to the top of this year’s performance rankings. Through February, energy, materials, and consumer staples were the top three sectors on a year-to-date basis. Meanwhile, last year’s leaders, communication services and information technology, were lagging.

Gold Resumes Its Rally

After pausing in recent weeks, the year-to-date rally in gold prices resumed and the precious metal climbed closer to the record high of more than $5,500 per ounce set in late January. Late Friday, gold futures were trading around $5,290. Silver prices also climbed during the week.

War Tensions Add a New Layer of Pressure

The war in Iran will put additional pressure on prices heading into the new week. Sunday night futures are showing substantial losses, with NDX futures down 110 and SPX futures down 33, indicating a possible weak start to the trading week.

Key Technical Levels to Watch

This is where it gets critical. Key technical levels to monitor closely are SPX 6,775 and 6,730. A decisive penetration with volume could lead to a test of 6,620 and possibly 6,550.

Key resistance near 6,950-53 and 7,000 and above are the keys to any upside surge.

Next week could be critical in determining the direction of the market for weeks to come, so vigilance to the support and resistance levels above will be mandatory.

In any case, as we always do at TheTechTrader.com, we’ll “Trade What We See, Not What We Think.” 

HARRY BOXER, THE TECHNICAL TRADER | www.thetechtrader.com

Indexes Recover But Don’t Pop the Champagne Yet

Last week the major U.S. stock indexes recovered most of the ground they lost the previous week, extending the market’s meandering start to 2026. The Nasdaq finished 1.5% higher — snapping a string of five consecutive weekly declines — while the S&P 500 gained 1.1%.

Large-cap growth stocks narrowed their year-to-date performance deficit relative to their value counterparts, as growth equity benchmarks outperformed value indices.

Investor Sentiment Hits 12-Week Lows

Despite the weekly bounce, bullish sentiment declined sharply. Individual investor optimism about the stock market hit 12-week lows mid-week, according to the American Association of Individual Investors survey. Just 34.5% of respondents were bullish about equities over the next six months, the lowest reading since late November.

Of note, the November low in sentiment occurred after the S&P 500 crumbled more than 4% over the previous month. This week’s survey came after a mostly flat start to the year for the index, but with signs of strength underneath. Cyclical sectors like industrials, energy, and materials led, which suggests investors might be focused on the surface rather than taking a deeper look at the trends below.

Equal Weight Index Tells a Different Story

Though a tech rebound is likely required to return the Nasdaq and S&P 500 to last year’s strength, the S&P 500 Equal Weight Index (SPXEW), which weighs all 500 components equally, posted a new all-time high just last week and is up 9.2% from November lows. The S&P 500 cap-weighted index is up just 4% over the same stretch.

Key Earnings and Catalysts to Watch

Next Wednesday’s earnings from Nvidia (NVDA) could return focus to the battered tech group. Investors will closely watch the AI giant’s margins amid rising industry costs. Big-box retail earnings roll on as well, with Home Depot (HD) reporting next Tuesday and Lowe’s (LOW) on Wednesday.

Oil Surges, Bitcoin Struggles

The price of U.S. crude oil climbed nearly 6% for the week, rising to the highest level in more than six months. Oil was trading above $66 per barrel, up 17% year to date, amid rising tensions between the United States and Iran.

Bitcoin fell for the fourth week out of the past five, although the price of the most widely traded cryptocurrency stabilized relative to the sell-off that began in late January. On Friday, Bitcoin was trading below $68,000, down about 23% year to date and well below the record high of approximately $126,000 set last October.

My Technical Read: Choppy, Sideways and Worth Watching Closely

Even though the S&P 500 (SPX) is up slightly on the week, I’d describe the multi-week price action as choppy and sideways. The bearish technical view highlights the high frequency of support tests at the 6,775-80 level, which could lend itself to an eventual break to the downside. In other words, it’s technically more bullish to see a sharp “V” bounce off key support levels rather than multiple tests in a short period of time.

Even though SPX did manage to close above its 50-day moving average on Friday for the first time in seven sessions, we’ll certainly be looking for evidence of a strong follow-through to break the index out of its 10-week trading range.

Key SPX Levels to Watch

SPX short-term support is now at the key 6,775-80 level. If broken, we’ll be looking at the next important support near 6,720.

In any case, as we always do at TheTechTrader.com, we’ll be “Trading What We See, Not What We Think.”

— HARRY BOXER, THE TECHNICAL TRADER | www.thetechtrader.com