New Year New Markets?
The S&P closed another shortened holiday week down just 1.25% after gapping down on Monday below the prior ATH level at 689.
Not the worst thing, noting we have higher lows still in play, and a hold of the 50 SMA (blue). Price also remains above the two bear engulfer highs at 675.
This is the first full week of 2026. Wall Street should be back at the desk and ready to rock. You should be too.
With the holiday’s, and lack of data last week, there’s not much to report on the fundamental front.
We can however start to look forward to prepare for the wave of economic data we are scheduled to receive this week.
Legit Labor Data (…Hopefully)
From ADP non-farm payroll, to labor participation rates, all things from the BLS this week will fall under scrutiny.
We want to see labor markets remain healthy enough to support consumer spending, but not so strong that a risk of wage price spiral comes into play.
That would kill the idea of more rate cuts and a supportive Fed through 2026.
What to watch:
- Prime Age Participation: Up (More supply of workers)
- Jobs Per Unemployed: Down (Less supply of jobs)
- Quits Rate: Down (Less wage pressure)
- Continuing Claims: Down (Unemployment rate stabilizes)
As we can see from above, the continuing claims are already down from their local peak. This should be enough to encourage an accommodative stance from the Fed, noting that rate cuts are “working.”
The latest SEP outlines an unemployment rate of 4.4% for 2026 and the prior read registered 4.6%.
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We’ll also be getting the ISM components. Ideally prices paid (blue), continues moving lower towards 50 and employment (green) continues moving sideways, not aggressively down.
This would be a decent signal that inflation is continuing to cool, and the labor market is not getting unbearably weak.
Crude Oil
In April everyone was a tariff expert. Just last week, everyone was a silver expert. This week, looks like everyone is a crude oil expert!
As an admitted crude non-expert myself, its an important lesson to kick off 2026 remembering that most headlines are noise and give some form of narrative to a move, but only price pays.
Forget about what you, or any other new expert thinks “should” happen, and instead focus on two key outcomes.
- Crude breaks the downtrend and lifts towards the $61.6 recent equilibrium point. Above that perhaps theres a short lived squeeze on volatility.
- Crude breaks the short term $55.85 support and takes a ride towards $52. Breaking that could bring in the longer term crude floor between about $41-39. If price ever got back to that floor, its likely a screaming buy.
Thats it.
It’s the first full week of 2026. Let’s not blow it on a shiny object idea if there is no price action strategy to apply.
Trade Brigade Live Squawk
New year. Same market. Better decisions. Join the intraday squawk to trade with information, not emotion.
Check out this recording for a taste of what each morning session is like: 07/09 Live Squawk
Onboarding support will be available through the evening and Monday morning starting at 6:30am EST before the 8am premarket-prep kick-off.
Broad Market Analysis
SPY – Monthly
Markets have been VERY structured over the last 5 years using prior highs as new support on major pullbacks. If markets see a larger downdraft, 610-12 could be the perfect spot to land.
This would be about a 10% pullback which typically happens about once a year. There is also confluence with the monthly 20 SMA as well as the fib 38.2 pulled from April low to ATH.
SPY – Monthly
The measured moves for the year based on the Dec. 31 closing price are $784-580.
January monthly expected move is $704-660.
Please note that this is just an options market volatility pricing for 1σ move, aka 68% probability that price will close within in 2026.
SPY – Weekly
Range compression more so than anything bearish when it comes to structure. Note the compression is still happening right over the fib 38.2 of the range, as well as the 20 SMA.
Perhaps a small look above and fail in the works, but not breaking trend yet.
SPY – Daily
Thinking through the Friday low as a potential higher low first, and a weakening of trend second. Really strong bull markets don’t have multiple interactions near the daily 50 in short proximity of time. Strong bull markets usually don’t have multiple closes below the 20 day.
Note also, markets don’t have to be bullish all the time. In fact it would be impossible. So this is a way of recognizing that momentum has come to a grinding halt, and our trading should reflect that.
If markets can successfully clear the highs, perhaps theres a new wave of bullishness into 2026.
SPY – Hourly
Some pathing ideas to get us started this week. Generally responsive trade should continue in between 689 and 679. Bulls of course have the edge above, bears below.
Trend here is down, so a flip of trend would start to firm up the daily higher low. Catalyst coming on Wednesday for the labor market should help this make a decision as to up and out or down and out.
A look above and fail on 689 again could be the nail in the coffin to remaining bullish. Would be a fairly straight forward notion of buyers not interested in higher prices after months of consolidation.
Market Internals – NYSE
Clearly offering a bullish divergence from the /ES on Friday. Speaks to breadth remaining solid, while the Mag 7 suffered.
Market Profile
Value shifting consistently lower from the Mon/Tues range. Poor high on Friday and PoC mid range. Possible that over VAH could be seen as thin structure retrace through A/B periods. Not true single prints though. Good excess low in I period.
Sector Spotlight – SMH, XLK, XLF, XLY
We can see the rotation happening in the market with select semiconductors continuing to power higher, but the Mag 7 continuing to act as a drag on the technology sector overall.
Discretionary took a beating last week with TSLA and AMZN failures, but financials are possibly finding a higher low over the breakout level thanks to JPM.
The point is money isn’t leaving EVERYTHING in the market, just select names. Remember rotation is bullish.
If you want the full take, including all of the nuance of breadth, risk appetite and much, much more, check out the weekend episode here:
Economic & Earnings Calendar
Labor data! We’ll be covering all of the 8:30 AM drops live in the pre-market prep.
Top watches: Not too interested here. Next week big banks!
Swing Stock Scans
AMTM – Daily
Base building out after an earnings gap and go. Holding the 20 SMA with relative strength on Friday. Over 30.65 should get this up towards highs at 34.45 if momentum can kick in. Look for premarket volume to be higher than average and for it to sustain into the morning session.
CMC – Daily
High tight flag forming with breakout to blue sky territory over 71.80 level. Not interested if this loses the daily 20 SMA.
COHR – Daily
Ascending triangle building into the ATH level. Over 198.5 could stage a new breakout. Not interested if price starts accepting below daily 20 SMA.
ODFL – Daily
Odd chart, and odd theme, but couldn’t ignore the strength from Friday and hold of the 20 SMA. Over 161.5 can see lift towards 173.25 from a technical perspective, but keep in mind this is trying to develop a fresh trend over the 200 SMA. Subject to failures.
WDC – Daily
Memory theme has been on FIRE recently and this is offering a new setup right at the ATH with huge strength on Friday. Over 188.35 is game on. Not interested if the trendline or 20 SMA fails.
XOM – Daily / Monthly
To scratch the itch of the Venezuela news, this has to be one of the best oil and gas charts out there. Massive monthly bull flag, and starting to engulf on the daily. Still room to go IF this theme can remain relevant and not fall apart on any crude weakness.