EB Daily Market Report - Special Report - Tuesday, January 27, 2026
First, the S&P 500 is on the verge of another all-time high. Its intraday all-time high was 6986.33. We eclipsed that earlier today at 6988.82. As far as all-time high closes go, the S&P 500's best to date has been 6977.27. Currently, as I write this, the S&P 500 is at 6981, so we're certainly threatening a significant breakout. Of course, the big, round, psychological level of 7000 is staring us in the face. That was my target for year end 2025, so I'm certainly not surprised that we're challenging it.
It's important to mention that setting a new all-time high, or pushing through 7000, or even continuing to climb into the 7000s, doesn't change the risk factor at all. The risks remain extremely high, in my opinion, so the only question is whether each of you want to take on the elevated risk of being invested in U.S. stocks (in this case, the S&P 500). I've discussed various options over the past several weeks. Most recently, we held our Model ETF Portfolio DRAFT, where we announced our weighting of sector ETFs for the next 90 days. We took a more defensive posture by overweighting areas like health care (XLV), energy (XLE), and materials (XLB), while considerably underweighting technology (XLK). There are ways to remain invested, but mitigate the risk somewhat. ETFs certainly spread the risk, rather than taking on individual stock risk.
I've received a lot of questions as to whether I'm remaining 100% cash. I'm not 100% cash, but I'm close. I've made the personal decision to avoid risk by limiting my exposure to U.S. stocks totally. But I completely understand if you want to invest your money. I would just make sure to keep stops in play in the event the risks are confirmed and stock prices do begin to decline. I believe there's downside risk of 10-15% in the S&P 500. It may or may not materialize.
My plan, at this point, is to await February 19th to draft new Portfolio stocks, likely providing more defensive stocks if the risks that I'm seeing now remain. In the meantime, I'm perfectly fine trading stocks and I am occasionally trading. I like the 3 sectors that were highlighted earlier and were overweighted in the Model ETF Portfolio. I bought PUMP today on its 20-day EMA test. I'm holding CLMT. Both of these stocks were featured in the DMR several days ago. I bought DVN on a 20-day EMA test and sold a couple days later for a small profit. TXG is a health care stock that I've traded a couple times in 2026. I took a shot with GE on the day of its earnings and ended up bailing with a small loss there.
I'm just not overtrading.
Our momentum ChartLists, Matt's Hot Stocks (HTCL) and Leading Stocks in Leading Industries (LSCL) have both been great options for discovering stocks that simply keep riding upside momentum. I would just be sure to keep trailing stops in place.
Q4 Earnings Webinar
I want to thank everyone for your patience as our team has dealt with the recent Winter Storm. Fortunately, it wasn't as bad for the Charlotte, NC area as it could have been, but we have experienced some issues, which was the case last night with our Q4 Earnings webinar. I also canceled this morning's Trading Places LIVE for similar issues. The good news is that all of the weather issues should be behind us and operations are now back to normal. We will have our Live Trading Room tomorrow morning at 10am ET, barring any unforeseen circumstances. Again, thanks to everyone for your patience.
I did prepare a ChartList for last night's Q4 Earnings webinar and I'm sharing that with you below:
Q4 Earnings (Q4EARNCL): https://stockcharts.com/articles/sharedcharts.php?cc=1002951&listNum=115
Password: Q4EARN9922
The first 10 charts are companies that I provided in the January 15th DMR, 5 that I thought looked good on a relative basis heading into earnings, while the other 5 showed poor relative strength. I'm generally only interested in stocks with SOLID relative strength. I ignore companies with poor relative strength. I certainly would not a hold a poorly-performing stock relative to its peers into its earnings report. These 10 companies have already reported quarterly results.
Then I provide stocks numbered 1001-1024. These are all companies with current poor relative strength that will be reporting quarterly results THIS WEEK. The final 37 stocks are numbered from 2001-2037 and these are the stocks I'm most interested in. One of my favorite trading strategies is to (1) follow stocks with strong relative strength heading into earnings, (2) see which stocks beat revenues and earnings per share, and then (3) await a pullback to key price support or await a reversing candle off a downtrend.
I've annotated 1 or 2 key levels of support on all 37 of these stocks for you to consider. Treat this as an educational piece of research or use it to trade actively - that's completely up to you. I'll discuss this in much greater detail during the Live Trading Room tomorrow, perhaps trading one or two of these.
Enjoy the rest of your day!
Happy trading!
Tom