EB Daily Market Report - Thursday, January 8, 2026

Tom Bowley - January 08, 2026

Executive Summary

Futures were a bit lower overnight and our major indices gapped down fractionally at the opening bell
We've seen relative strength in the Dow Jones and in the small cap Russell 2000 throughout today's session
Value-oriented areas are again taking on a leading role as energy (XLE, +3.40%) and consumer staples (XLP, +2.70%) lead all sectors
9 of 11 sectors are higher, though technology (XLK, -1.87%) and health care (XLV, -1.05%) are notably weak
Home construction ($DJUSHB, +) and containers & packaging ($DJUSCP, +4.40%) are performing very well
Defense stocks ($DJUSDN, +2.88%) shot higher earlier, but have since pulled back, reflecting a false breakout - more on this in the Market Outlook section below
Cryptos were down earlier, but many have bounced back; I take a look at bitcoin ($BTCUSD, -0.24%) in the Sectors/Industries section below
Crude oil ($WTIC, +3.36%) has spiked to near $58 per barrel today, aiding the strength in the XLE
The 10-year treasury yield ($TNX) is up 5 basis points to 4.18% ahead of Friday's nonfarm payrolls report; analysts are looking for 73,000 jobs, slightly higher than the 64,000 reported last month
Seagate Technology (STX, -8.92%) and Western Digital Corp (WDC, -7.65%), two memory semiconductor stocks, are likely being hit due to profit taking and are the S&P 500's worst performers today

Market Outlook

There has been some wild back and forth action in many areas of the market recently and today the defense industry ($DJUSDN) could be the poster child. President Trump announced a $1.5 trillion military budget in 2027 and the group soared earlier. It's since fallen back, however, looking like a failed breakout attempt and, perhaps, the right side of a potential cup:

This group has been helping lead industrials (XLI) to all-time highs of late, but given the chart and potential pattern above, it wouldn't be a shock to see defense stocks pause temporarily at this level.

Sectors/Industries

Bitcoin ($BTCUSD) has been strengthening in recent days, so my question is whether it'll break out above key short-term price resistance or if it simply rolls back over to new lows. Currently, here's what the chart looks like for bitcoin, etherium ($ETHUSD), and XRP ($XRPUSD):

The rebound has been nice, but are these just failed attempts within a down channel? Are we only testing the upper down channel line, before the next leg lower. Clearly, the market has been in "risk off" mode, and that adds to the uncertainty here. Another leg lower in cryptos would be another warning sign for U.S. equities.

ChartLists and Trading Strategies

It doesn't make a lot of sense to take on new trades right before a critical nonfarm payrolls report. It would be great if we enter trades and the report works out for those trades. But, in my view, that's a big gamble. Let's check out the report, the market reaction, and then go from there.

Upcoming Earnings

We will begin publishing our Upcoming Earnings ChartList and our Upcoming Earnings Relative Strength ChartList this weekend as the big banks get set to report earnings, starting on Tuesday, January 13th.

Economic Reports

Initial jobless claims: 208,000 (actual) vs. 210,000 (estimate)

Q3 productivity: 4.9% (actual) vs. 4.9% (estimate)

Happy trading!
Tom