EB Daily Market Report - Brief Update - Wednesday, January 21, 2026

It's been an interesting day, but very little has changed.

Our major indices are up nicely in the final hour and have either filled gaps left by Tuesday's opening gap down or they've neared those gap resistance levels.  Unfortunately, poorly-performing growth stocks have been a big issue for the bulls since the latter part of 2025 and they've come nowhere close to filling their gap.  In other words, no one is rushing back into growth stocks.

We do still have our pockets of strength, though, as several semiconductor stocks ($DJUSSC, +2.65%) litter the S&P 500 leaderboard.  There just aren't enough growth stocks doing this.  Leadership is once again centered among more value-oriented areas of the market.  Energy (XLE, +2.41%) and materials (XLB, +2.09%) are today's sector leaders and this rotation has been evident for weeks now.

Many believe rotation to value stocks is a healthy transition for U.S. equities.  I do not.  I do believe it will help to contain losses, but I don't believe it'll lead to higher market indices.  The best way to power forward in our more growth-oriented indices is to see leadership return to areas like technology.  As I mentioned above, semiconductors are trying to do their part, but too many other areas, like software ($DJUSSW, -1.62%) are not.

Netflix (NFLX, -2.55%) reported its latest quarterly results after the bell on Tuesday and had an opportunity to begin shifting the market bias back to growth stocks, but that hasn't materialized.  NFLX is near its high of the day and did manage to hold onto solid price support in the low 80s.  But it is still down for the day after showing significant relative weakness the past few months leading up to this report.

I'll be back tomorrow with my next Daily Market Report.

Happy trading!

Tom