| By Harry Boxer, Technical Market Analyst
Markets Push to New All-Time Highs
Markets surged to new ALL TIME HIGHS on most indices to start the new year . The S&P 500 and the Dow surpassed record highs set two weeks earlier, and the NASDAQ climbed to within 1.2% of its historic peak set more than two months ago. On the week, the Nasdaq composite index gained 1.9% ,while the S&P 500 advanced 1.6%.
Small Caps Lead as Market Breadth Expands
The Russell 2000 small cap index outperformed its large-cap peers by a wide margin and eclipsed a record high set four weeks earlier. The Russell 2000 Index added 4.7% for the week.
Over the past month and a half, the index has added nearly 14%.The RUT is up over 6% over the past six trading days, following a bullish bounce off support at the 50-day Simple Moving Average (SMA) last week. The Relative Strength Index (RSI) on the RUT is currently 66, below the “overbought” threshold of 70, suggesting that the index hasn’t yet stretched too far to the upside.
The nearly 5% rally in the RUT, along with the 2.6% move higher in the S&P 500 Equal Weight index (SPXEW), suggest a broadening of the rally and generally a healthier bull market. Sectors such as Health Care, Industrials, Biotech, Materials, and Financials have been the biggest beneficiaries of the rotation trade. Stock group strength was lead by Consumer Discretionary +5.8% & the Materials sector +4.8%
Mega-Cap Tech Diverges as Stock Picking Takes Center Stage
If there was an underperforming area of the market this week it was largely mega-cap tech, which may seem unusual to say, but not if investors are rotating into other areas of the stock market. However, investors are becoming more discerning and not treating all mega-cap tech stocks equally. Alphabet (GOOGL) is up 4.5% and hit a fresh all-time high on Friday and Amazon (AMZN) was up over 9% last week, while Apple (AAPL) lost more than 4% and Nvidia (NVDA) nearly that. Additionally, the PHLX Semiconductor Index (SOX) hit a fresh all-time high last week, but it wasn’t driven by the chip leaders of 2025, like NVDA, AVGO, or AMD.
The recent rally in the SOX was mostly fueled by gains in the semiconductor equipment manufacturers (AMAT, ASML, LRCX, KLAC) and memory chip stocks (MU, SNDK). While the expansion in market breadth is an encouraging sign for the bulls, it appears 2026 will be a “stock pickers’ market”.
Commodities, Crypto, Volatility & Key Technical Levels
Precious metals prices rebounded from the previous week’s declines, extending rallies that began to pick up momentum in early 2025. Gold was trading above $4,520 per ounce on Friday afternoon and near a record level set two weeks earlier. Silver surpassed $80 per ounce for the first time on Tuesday and was trading just below that record level on Friday afternoon.
Oil prices fluctuated widely amid a heavy flow of geopolitical news affecting commodity markets. The price of U.S. crude fell to as low as $56 per barrel on Wednesday before rebounding to as high as $60 on Friday, resulting in a more than 3% weekly gain .
Bitcoin continues in a down trend since the early October all time high at $126000 + to form a large wave 2 BEAR wedge and if broken projects to as low as the mid $70’s,with the low $60’s possible
The CBOE volatility index or VIX ,closed unchanged on the week ,but is down 3.25% on the year,so far
Technical levels to monitor closely going forward are shorter term support near SPX 6900-6908, 6824-5, & 6720-22, More intermediate support is seen at 6628-30 & 6520-22 Technical Chart resistance appears near SPX 7100-7120 & 7170-80.
In any case ,we will always “Trade What We See, Not What We Think”
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