| By Harry Boxer, Technical Market Analyst

| By Harry Boxer, Technical Market Analyst

AI Narrative Pressures Markets Again

Last week the major U.S. stock indexes fell around 1% to 2% as shifting narratives about AI prospects and technology stocks continued to drive the broader market. For the S&P 500, it was the fourth negative week out of the past five, although the previous declines were all less than 1%.

The week ended with net declines in the S&P 500 (-1.57%) Nasdaq (-2.03%) Market volatility has started to pick up over recent weeks. This has been led by selling across the mega-cap technology companies, with the Magnificent 7 down another 2% last week, taking losses in 2026 to near 7%.

Broader Spillover and Risk Rotation

Last week we saw signs of broader spillovers from this weakness as investors start to price disruptions from AI across other parts of the corporate sector, highlighted by sell-offs in financial services and insurers, real estate and even trucking and logistics.

Thus far, these fears are speculative and seemingly represent a shift toward choppier trading in risk markets broadly. Last week’s sell-off included other risk assets like cryptocurrencies and precious metals, while we also saw a push into more “safe haven” like assets, such as U.S. Treasury bonds and defensive equity sectors such as utilities.

Key Technical Levels to Watch

Technical chart levels to closely monitor going forward are: S&P 500 support near 6780 & then the 6722-30 zone. If violated, look for 6630-35 & 6520-25 levels as poss lower level support zones SPX resistance exits near 6880 then formidable resist with several tops near 7000. If they should manage to get a thrust past that ,a surge to 7140-45, possibly 7225-50 could take place!

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

HARRY BOXER
THE TECHNICAL TRADER

| By Harry Boxer, Technical Market Analyst

Tech Weakness vs. Small-Cap Strength

Major U.S. equity indexes finished a volatile week mixed, as large-cap technology stocks suffered their worst week since November while small-cap and value-oriented stocks added to their year-to-date gains. Stocks started and ended the week with rallies, helping to offset sell-offs on Tuesday, Wednesday, and Thursday. Index results varied widely; the Dow rose 2.5% and finished above the 50,000-point level for the first time, the S&P 500 posted a fractional decline, and the NASDAQ fell 1.8%.

Capitulation Signals Emerging in Risk Assets

Friday’s sharp bounce-back in higher risk areas of the market, like software and crypto, may be a signal of capitulation/seller exhaustion. We can’t be sure whether it’s a short-term oversold bounce that will give in to more selling pressure next week. It’s impossible to know at this point in time but given the healthy price action in other non-tech/crypto areas of the market, along with the 17% drop and sub-20 VIX, its possible that tech can at least stabilize from here.

Rotation, Not Market Breakdown

Up until February, stocks had largely remained insulated from the elevated volatility that currencies and commodities have been experiencing in the early days of 2026. That changed last week as the S&P 500 gave up its gains for the year, driven by broad weakness across technology, particularly software, which has fallen almost 25% over the past three months.

Even so, the S&P 500 sits less than 2% below its all-time high, and the Dow hit new all time record highs later in the week. This suggests that market action reflects rotation and repricing, rather than broad deterioration. Because of last Friday’s sharp rally back, the S&P 500 managed to only lose 0.13% but Nasdaq lost 1.84%.

Old Economy Leadership Builds

After years of tech-led dominance, the market is experiencing a meaningful rotation toward traditional “old economy” sectors. Investors appear to be gravitating toward real-asset businesses and industries that had previously fallen out of favor: oil & gas, chemicals, transportation, consumer staples, and regional banks, all of which have been outperforming since high-flying tech stocks began losing momentum late last year.

Metals Volatility Continues

Risk appetite softened more broadly last week as speculative assets came under pressure. The recent trend of heightened precious metals price volatility continued, with gold rebounding from the previous week’s decline and silver retreating. Despite gold’s weekly gain, its price of around $4,980 per ounce on Friday afternoon was well below the record of nearly $5,586 reached on January 29. Silver was trading around $77 per ounce on Friday, down from a record $121 on January 29.

In any case, as we always do at thetechtrader.com, we will “Trade What We See, Not What We Think.”
Harry Boxer, The Technical Trader
www.thetechtrader.com

| By Harry Boxer, Technical Market Analyst

Markets Push to Record Highs Before Late-Week Reversal

Last week the major U.S. indices started on a positive note, sending the S&P 500 to a record high exceeding 7000 intraday for the first time ever on Wednesday, but the market turned negative the last 2 sessions and finished mixed overall for the week. The S&P 500 still managed to gain 0.3% on the week while the recently weaker Nasdaq gave black 0.2% ,a result of an apparent rotation out of many large cap market leader tech stocks.

January Delivers Another Month of Gains

The U.S. stock markets maintained modestly positive momentum in January, with each of the three major indexes posting monthly gains of monthly gains of around 1% to 2%. For the S&P 500, it was the eighth positive monthly result out of the past nine; for the Dow, it was the ninth positive month in a row.

However, I would characterize the price action over the last two days of the week as a “risk off” shift in sentiment–the tech sector has been hit with heavy selling (outside of a few pockets) The only two sectors that were higher on Friday were consumer staples and health care, which are classic defensive plays. This type of speculative deleveraging could be a short-term phenomenon, but it does create some near-term technical damage so healing could take time.

Gold and Silver Go Parabolic—Then Reverse Hard

The highlight of the week however saw gold and silver prices go parabolic to record highs on Thursday, only to get crushed on Friday and finish negative for the week following the nomination of a new Fed chair. Gold futures were trading for less than $4,900 per ounce late Friday afternoon, just a day after climbing as high as $5,586. Silver took an even steeper dive, sinking to around $82 per ounce on Friday after peaking at $121 the day before.

In addition, the price of Bitcoin, the most widely traded cryptocurrency, was down around 4% for the week as of Friday afternoon, extending a decline that began last fall. Bitcoin dove near $81,000 and was trading around $84,000 near the close. That was down from a record $126,000 reached less than four months earlier. As recently as January 13, Bitcoin was trading around $97,000.

Volatility Spikes as Tech Earnings Diverge

The Cboe Volatility index (VIX) ramped up and nearly hit 20 on an intraday basis on Thursday, following a post-earnings tech-fueled sell-off. Several key tech earnings reports were one of the main drivers for the uptick in volatility–Meta Platforms rallied nearly 10% while Microsoft nearly declined the same amount; Memory and storage-related stocks such as SanDisk, Seagate, and Western Digital, rallied on strong results and guidance.

Oil Prices Surge to Multi-Month Highs

The price of U.S. crude oil was up nearly 7% for the week as of Friday afternoon at roughly $66 per barrel, the highest level in more than four months. While oil was up around 13% on a year-to-date basis, it remained well below prices recorded in early 2025.

Key Technical Levels to Watch

Technical levels to closely monitor next week are SPX support near 6840 , 6789-90 and key support near 6720. Resistance obviously near 7000, If exceed with a thrust a market extension to 7050 & 7140 may be possible

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 at www.thetechtrader.com

| By Harry Boxer, Technical Market Analyst

Markets Slip Modestly but Remain Near Record Highs

For the second week in a row, the S&P 500,-0.4% and the NASDAQ -just 0.1%,posted fractional declines. The SPX index ended up less than 1% below the record high it set on January 12, while the NASDAQ was about 2% shy of its historic peak set nearly three months ago

The stock market’s relatively modest overall setback for the week didn’t come without drama, as U.S. indexes tumbled around 2% on Tuesday before staging a rebound rally the following day. International tensions over Greenland and the related prospect of tariffs were the key catalysts.

Precious metals were in the spotlight as prices surged again , extending rallies parabolically that have lifted gold and silver well above their previous record levels. Gold was trading around $4,985 per ounce on Friday afternoon, while silver surpassed $100 per ounce for the first time, just a couple of weeks after it first breached the $80 threshold.

Volatility Pulls Back—but Risks Remain Elevated

The VIX (volatility index)has pulled back from near 21 to 15 over the past week ,but I’m not convinced that we are done with volatility. Next week the Fed will be holding a monetary policy meeting and we’re going to get earnings reports from four mega-cap tech companies (MSFT, META, AAPL, TSLA). I don’t expect any surprises from the Fed meeting (although anything can happen), but I think results out of the tech sector will be a primary driver of trader sentiment next week.

Rotation, AI Concerns, and Key Earnings Ahead

Markets have recently been going through a rotation trade away from mega-cap tech in 2026, but software stocks have been under pressure on AI concerns

Then there’s the red-hot group of memory stocks (SNDK, MU, STX, WDC, along with semi equipment manufacturers like ASML, AMAT, KLAC, LRCX), and we’re going to get results from ASML on Wednesday and SanDisk/Western Digital on Thursday. Buckle up because the potential for big moves, one way or the other, following these reports seems likely

Nasdaq Technical Support Holds—for Now

Traders have mostly shied away from tech stocks in 2026 as money has rotated to other areas of the market. However, interest appears to have perked up over the past couple days, and it coincided with a technical support test for the Nasdaq 100 index (NDX). On Tuesday the NDX dropped down to its 100-day Simple Moving Average (SMA) for the third time over the past three months and fortunately, for the bulls that is, there was another follow-through bounce off this indicator. The test and hold of this support level is bullish as it signals traders willingness to own tech at certain price/valuation levels. Going forward however, the bulls likely don’t want to see a higher frequency of support tests in the near-term, as this could be a harbinger of an eventual break below this indicator.

Key Technical Levels to Watch

Next week I encourage you to closely monitor Support levels near SPX 6790 & 6720. Any move blow those with downside energy could see 6630 & possibly 6520 tested. Key resistance lies near 6985. If through that with a thrust we could extend to 7175-90 or more

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

| By Harry Boxer, Technical Market Analyst

Market Rotation Accelerates in Early 2026

The rotation in market leadership that began in November has accelerated in the early weeks of 2026, sending a distinctly pro-cyclical signal. Small- and mid-caps, value stocks, international equities, and cyclical sectors such as materials, industrials, and consumer discretionary are outperforming—a stark contrast to the narrow, mega-cap-led leadership of the past three years . The common thread across these areas is that they tend to benefit most from an improving economic outlook and the prospect of Fed easing.

Major Indexes Stall as Small Caps Continue to Outperform

The major U.S. indexes posted fractional declines as stocks failed to maintain the previous week’s upward momentum. The S&P 500 traded within a narrow range as earnings season opened, finishing the week 0.5% below a record high that it set on Monday. Nasdaq lead with a loss of 0.7%

The Russell 200 small-cap benchmark outpaced its large-cap peers by a wide margin for the second week in a row, marking a sharp rotation from small caps’ lagging 2025 performance. With its more than 2% weekly gain, the Russell 2000 Index was up nearly 8% on a year-to-date basis versus less than 2% for a comparable large-cap index.

Sector Performance Highlights Rotation

Sector-wise, for the week, the Real Estate sector led all groups with a gain of nearly 4% with the Consumer Staples sector just behind at +3.7%. Leading losers were the Financials -2.3% and the Consumer Discretionary group off 2%

Mega-Cap Tech and Software Divergence Deepens

Divergence continues to develop within mega-cap tech, software and chip stocks, as investors attempt to discern how AI adoption will potentially disrupt business models from former leaders. We have recently seen a divergence in mega-cap tech (AAPL, MSFT, META relative underperformers, GOOGL, AMZN winners), and to some extent within the semiconductor space (semiconductor equipment manufacturers and memory stocks outperforming), and this week software stocks came under pressure.

Multiple familiar large-cap software stocks have fallen to fresh 52-week lows this week: Adobe Systems (ADBE), Atlassian Corp. (TEAM), Docusign (DOCU), HubSpot (HUBS), Monday.com (MNDY), Salesforce (CRM), ServiceNow (NOW) and Workday (WDAY). The bearish narrative that has been developing is that AI companies like OpenAI and Anthropic will disrupt traditional software business models. However, it should be noted that several analysts came out in defense of these traditional players, calling the selling overdone and potentially a buying opportunity.

Technical Warning Signals to Monitor

In addition, I wanted to note that a serious negative divergence on the S&P 500 MACD continues to build, and yet has not affected price for the moment. We’ll need to monitor that closely.

Internationally, the major Japanese stock market benchmark surged 4.2% for the week, surpassing a record high set the previous week. Since mid-December, the index has gained more than 10%

Key Technical Levels

KEY technical levels to be aware of going forward: The SPX resistance is now clearly at the 6885-93 zone. A strong surge above that might get to 7070-75 then possibly 7149-50. Chart support can be seen near 6885, 6835, then 6620-22. Should those levels be penetrated we may see tests of 6620 & 6520

As to the trailing Nasdaq 100 or NDX : Key resistance now at 25875-85 & 26180-85 Support looks to be near 25085, 24645 & 23855.

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

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