EB Weekly Market Report - Tuesday, January 20, 2026

Tom Bowley - January 20, 2026

ChartLists/Spreadsheets

The following ChartLists/Spreadsheets were updated over the weekend:

Strong Earnings (SECL)
Strong Future Earnings (SFECL)
Raised Guidance (RGCL)
Bullish Trifecta (BTCL)
Short Squeeze (SSCL)
Leading Stocks (LSCL)
Matt's Hot Stocks (HTCL)
Key Manipulation Spreadsheet

The above ChartLists and spreadsheet have been updated. You can view and/or download these ChartLists from our website, and also read about them to gain a better understanding of how they can help in your trading success.

Weekly Market Recap

Major Indices

Sectors

Top 10 Industries Last Week

Bottom 10 Industries Last Week

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Top 10 Stocks - S&P 500/NASDAQ 100

Bottom 10 Stocks - S&P 500/NASDAQ 100

Big Picture

Nothing has changed, either short-term or long-term. I still see short-term warning signs that are more applicable for short-term traders. I also still see the S&P 500 going much, much higher over time - great news for long-term investors.

While my long-term outlook remains very bullish, we are seeing weakness today that could confirm or start to confirm a potential downtrend.

Sustainability Ratios

Here's the latest look at our key intraday ratios as we follow where the money is traveling on an INTRADAY basis (ignoring gaps):

QQQ:SPY

Keep in mind that the intraday analysis provided is a "work in progress". I continue to analyze this data to see if it helps provide us clues about calling market direction. It makes common sense to me that it should help in some sense, but it'll require a much longer-term study to determine its worth.

This relative downtrend simply underscores the huge rotation that's been taking place from growth to value. Personally, I don't think this is healthy and could lead to a rough market period ahead.

IWM:QQQ

Small caps remain a viable investment alternative. Even with today's selling, I'm seeing more money rotating over into the small cap area. 2026 may turn out to be a solid year for small cap investing.

XLY:XLP

Well, we've seen another significant downturn in the intraday XLY:XLP relative strength line. More and more money seems to moving into the defensive staples sector and away from the aggressive discretionary stocks. So long as that continues, it'll be extremely hard for me to buy into the S&P 500 launching higher from here.

Sentiment

5-day SMA ($CPCE)

Sentiment indicators are contrarian indicators. When they show extreme bullishness, we need to be a bit cautious and when they show extreme pessimism, it could be time to become much more aggressive. Major market bottoms are carved out when pessimism is at its absolute highest level.

Keep in mind that the above 5-day SMA reading of the CPCE is our "speed boat" sentiment indicator that changes quite frequently. While the .75+ level has been where many bottoms have occurred in the past, the .65 or so level has been marking short-term bottoms in 2025 and 2026. I believe it's very possible that we could see more readings at .75 or higher, if we're just starting a significant decline.

253-day SMA ($CPCE)

This longer-term 253-day SMA of the CPCE is our "ocean-liner" signal, unlike our short-term speedboat indicator. Any significant change in direction in this 253-day CPCE, in the past, has had profound effects on the S&P 500. I wouldn't want to bet against what this indicator is telling us, which is that we should be cautious in 2026. For the first time since mid-2025, we are clearly seeing this 253-day SMA turn back higher. That suggests that sentiment may have bottomed and that pessimism will begin to return to higher levels over time. That nearly always occurs when stock prices are declining or, at a minimum, consolidating.

Perspective

I've been talking about this a lot lately, because, in my opinion, there isn't enough conversation about it. When the stock market puts together a few good years in a row, we should all think about lowering our bar of market expectations a bit. The following chart shows a 3-year rate of change (ROC) on the S&P 500, dating back to 1950. In October 2025, this 3-year ROC hit close to 90%, which doesn't happen often. The following chart shows what's happened subsequently in other years when such a strong 3-year period has occurred:

One of my favorite market quotes is, "trees don't grow to the sky." When we enjoy a lengthy period of above-average market returns, there's a very good chance that we'll see a reversion to the mean.

Long-Term Trade Setup

Since beginning this Weekly Market Report in September 2023, I've discussed the long-term trade candidates below that I really like. Generally, these stocks have excellent long-term track records, and many pay nice dividends that mostly grow every year. Only in specific cases (exceptions) would I consider a long-term entry into a stock that has a poor or limited long-term track record and/or pays no dividends. I try to review the long-term picture once a month or so and I updated them last week. Below is a quick recap of how these stocks looked as of Monday, January 12th:

JPM – monthly PPO could be rolling over after a strong 3-year run
BA – attempting to close at highest weekly level in over two years
FFIV – tested its April low, rebounded and is now testing 20-week EMA
MA – key price support remains near 525
GS – has more than doubled since April low; very overbought on monthly chart
FDX – just breaking out to all-time high
AAPL – recent weakness has resulted in bullish 20-week EMA test
CHRW – another that has now doubled off April low; very overbought
JBHT – surge continues; key overhead resistance is from 210-215
STX - extremely overbought and negative divergence is now on weekly chart
HSY – rallying again, but 200 price resistance remains critical for now
DIS – multi-year consolidation remains; needs to clear 125
MSCI – been in fairly tight 520-590 range since rallying off April low
SBUX - looking to close over 90 this week for the first time since August
KRE – excellent uptrend since October, looking to clear 68-70 resistance
ED – bounced again off 95 support; currently in 95-105 range
AJG – bouncing on weekly chart, but 20-week EMA and 280 are resistance
NSC – love the long-term chart, 270-300 is current range
RHI – did 25 mark the bottom? First bullish step is close over 20-week EMA
ADM – weekly chart solid, breakout above 64.50 is next key
BG – bounced off 20-week EMA support and broke out again; 109 next?
CVS – continues to trend higher and above rising 20-week EMA
IPG – acquired by Omnicom Group (OMC); will no longer track this one
HRL - moved back up to test 25 resistance and failed, currently in 21-25 range
DE – needs to clear 500, then 530; 430-440 is support range
LULU - cleared 20-week EMA, that is now huge support
TTD - lost support at 39-40, struggling to clear that resistance level now
META - as mentioned last month, can it clear its falling 20-week EMA?
ADBE - looks like potential reversing right shoulder, but new low would negate

Keep in mind that our Weekly Market Reports favor those who are more interested in the long-term market picture. Therefore, the list of stocks above are stocks that we believe are safer (but nothing is ever 100% safe) to own with the long-term in mind. Nearly everything else we do at EarningsBeats.com favors short-term momentum trading, so I wanted to explain what we're doing with this list and why it's different.

Also, please keep in mind that I'm not a Registered Investment Advisor (and neither is EarningsBeats.com nor any of its employees) and am only providing (mostly) what I believe to be solid dividend-paying stocks for the long term. Companies periodically go through adjustments, new competition, restructuring, management changes, etc. that can have detrimental long-term impacts. Neither the stock price nor the dividend is ever guaranteed. I simply point out interesting stock candidates for longer-term investors. Do your own due diligence and please consult with your financial advisor before making any purchases or sales of securities.

Looking Ahead

Upcoming Earnings

The following list of companies is NOT a list of all companies scheduled to report quarterly earnings, however, just key reports, so please be sure to check for earnings dates of any companies that you own. Any company in BOLD represents a stock in one of our portfolios and the amount in parenthesis represents the market capitalization of each company listed:

Monday: None
Tuesday: NFLX ($373 billion), IBKR ($124 billion), MMM ($89 billion), FAST ($50 billion)
Wednesday: JNJ ($527 billion), SCHW ($184 billion), PLD ($124 billion), TRV ($60 billion
Thursday: GE ($343 billion), PG ($338 billion), INTC ($224 billion), ISRG ($192 billion)
Friday: IBN ($110 billion), SLB ($70 billion)

Key Economic Reports

Monday: None
Tuesday: None
Wednesday: October construction spending (delayed), December pending home sales
Thursday: Initial jobless claims, Q3 GDP, November personal income & spending (delayed), November PCE index (delayed)
Friday: January consumer sentiment

Historical Data

I'm a true stock market historian. I am absolutely PASSIONATE about studying stock market history to provide us more clues about likely stock market direction and potential sectors/industries/stocks to trade. While I don't use history as a primary indicator, I'm always very aware of it as a secondary indicator. I love it when history lines up with my technical signals, providing me with much more confidence to make particular trades.

Below you'll find the next two weeks of historical data and tendencies across the three key indices that I follow most closely. The percentage for each calendar day represents the annualized return for that day. An example of how this is calculated is reflected next to the first day under the S&P 500 and in parenthesis:

S&P 500 (since 1950)

Jan 19: -7.22% (Ex: cumulative gains = -1.43% over 50 trading days since 1950. -1.43% x 253/50 = -7.22%)
Jan 20: -67.02%
Jan 21: +3.84%
Jan 22: -7.35%
Jan 23: +40.39%
Jan 24: -15.36%
Jan 25: +10.34%
Jan 26: +29.56%
Jan 27: +0.64%
Jan 28: +57.59%
Jan 29: +18.30%
Jan 30: +4.64%
Jan 31: +70.43%
Feb 1: +47.30%

NASDAQ (since 1971)

Jan 19: +46.70%
Jan 20: -69.20%
Jan 21: -15.94%
Jan 22: -28.63%
Jan 23: +93.41%
Jan 24: -24.68%
Jan 25: -5.40%
Jan 26: +45.80%
Jan 27: -62.78%
Jan 28: +93.44%
Jan 29: +10.57%
Jan 30: -7.03%
Jan 31: +83.40%
Feb 1: +119.96%

Russell 2000 (since 1987)

Jan 19: +10.17%
Jan 20: -103.10%
Jan 21: -37.80%
Jan 22: +5.91%
Jan 23: +97.43%
Jan 24: -1.36%
Jan 25: +4.75%
Jan 26: +74.67%
Jan 27: -95.74%
Jan 28: +40.38%
Jan 29: +1.76%
Jan 30: -74.34%
Jan 31: +104.07%
Feb 1: +198.28%

The S&P 500 data dates back to 1950, while the NASDAQ and Russell 2000 information date back to 1971 and 1987, respectively.

Final Thoughts

Last week wasn't a bad week, but it was certainly better for small caps. The large cap S&P 500 and NASDAQ 100 both finished down for the week and rotation worsened once again. These are developments that we should not take lightly, as it's quite possible that the big Wall Street firms are exiting quality growth stocks ahead of a possible stock market downturn. Normally, when growth stocks struggle, it could be a sign of economic weakness ahead or the possibility of another inflation scare. My primary takeaway from market action since the beginning of December is that risks are significantly higher on the long side right now. That's the way I'm approaching the stock market.

Here are a few things I'll be watching this week:

January Effect. Now that the 10/28 to 1/18 bullish period wound up in the 4th quadrant (worst 25% of all 10/28 to 1/18 periods since 1950), there's a higher likelihood that the balance of 2026 could be very challenging. Another similar indicator is how the month of January finishes. The S&P 500 closed out 2025 at 6845. It's now January 20th and the S&P 500 is currently down about 0.5% for the month thus far. Unless that changes by January 31st, we'll get another cautious historical signal.

Earnings. We've seen mostly bank earnings to date, but that starts to change this week. Netflix (NFLX) reports after the closing bell today and, quite honestly, the stock has been under considerable pressure since the end of June. The AD line has been moving lower for the past 3 months and NFLX is trading at a 52-week relative low vs. its internet peers ($DJUSNS). The picture that's being painted is that this is likely to be a very challenging quarter for NFLX. We'll find out after the closing bell. In addition to NFLX, several industrials and health care companies will be reporting this week and then we'll hear from the Mag 7 stocks, starting next week. AAPL, MSFT, TSLA, META, and AMD will all report results next week.

Growth vs. Value. The growth to value ratio that I like to follow (IWF:IWD) keeps falling apart and today could close at its lowest level since late May. Why is Wall Street exiting growth stocks at such a rapid pace? I don't know the answer, but I definitely respect the warning sign.

10-Year Treasury Yield. I don't know if you've been watching, but the TNX has been moving higher and now is at nearly 4.30%, its highest level since early September. For me, the question is why? Are bond investors building in a potential cushion for perhaps an inflation bump? I don't believe that to be the case, but it would certainly help to explain why growth stocks are so out of favor.

Volatility Index ($VIX). I like the quote that "nothing good happens with the VIX above 20 and rising". Well, it's moved above 20 today for the first time since November. As the VIX accelerates, S&P 500 losses typically do the same.

Happy trading!
Tom