1/5 Cautiously Bullish. 600 Buying | 250 Selling.
% Stocks Over 50SMA is Bearish. Primary Indicator is Neutral. 20% Weekly is Bearish.
The market begins 2026 with mixed leadership as mega-cap tech weakness caps broad gains despite solid strength in industrials and chipmakers. Notable late-day momentum in aerospace/defense and industrials signals potential short-term continuation, while semiconductors show signs of near-term rotation risk. Volatility remains subdued, supporting a cautiously optimistic stance amid consolidation in major indices.
Energy (+2.1%) and industrials (+1.9%) led sector gains, driven by defense and construction strength, while consumer discretionary lagged amid Tesla and Amazon declines. Semiconductor strength was mixed, with chipmakers like NVIDIA and Micron outperforming but core semis fading late. Financials and small/mid caps showed steady demand, reinforcing selective risk appetite.
Upcoming Catalyst: Watch Monday’s December ISM Manufacturing Index (consensus 48.4%) for early economic direction; midweek brings ADP Employment Change and ISM Non-Manufacturing data, critical for gauging labor and service sector momentum.
Key Takeaway: Focus on high-volume continuation setups in aerospace/defense (BA, RKLB), industrials (GE, HWM), and datacenter infrastructure (VRT). Exercise caution on semiconductors showing late-day profit-taking; wait for reclaim of intraday highs before adding exposure. Use support levels as clear stop-loss points and monitor sector rotation closely, especially if mega-cap tech weakness persists.
Watchlist
Continuation: RKLB (S1: 75, S2: 74, S3: 73, R1: 76, R2: 77.5, R3: 79)
Anticipation: LPTH (S1: 11, S2: 10.5, S3: 10.5, R1: 11.5, R2: 11.5, R3: 12)