SPY, the SPDR S&P 500 ETF fell -1.03% last week, while the VIX closed at 14.51, indicating an implied one day move range of +/-0.91% & an implied one month move range of +/-4.19%. (Please note that all charts are per Friday 1/2/26 when the note was begun, as travel & illness prevented timely publishing)
Their RSI is just above the neutral 50 level & sits currently at 52.85, while their MACD is bearish.
Volumes were -7.57% lower than the prior year’s average (66,880,000 vs. 72,361,230), which when accounting for the fact that it was a shortened holiday week signals that there was quite a bit more negative sentiment than the week prior.
Monday the week began with a note of uncertainty & limited participation, when a low-to-average volume session resulted in a decline & a doji candle on the day, and a wait & see approach to the final week of the year set in.
Tuesday too continued this trend, with even less volume and a smaller range on the doji candle.
Wednesday year end profits were taken when a lower open caused a collapse throughout the day, leading SPY to close -0.74% down on the day heading into 2026 on the second highest volume of the week, while simultaneously breaking down & closing below the support of the 10 day moving average.
Thursday was New Year’s Day so markets were not open, causing back-to-back four session weeks.
Friday the first trading session of the year opened on a gap up, tested higher, but profits taking set in early & the support of the 10 DMA faltered again, causing the session to close below its open.
Heading into a new week, there will be a lot of focus on employment data, as well as final PMI data & the U.S. Trade Deficit, and there’s not much in terms of major market moving earnings reports.
With that said, the upside case revolves around breaking above the 10 DMA with strong volumes & hoping that market participants continue to pile in to force a run at SPY’s all-time high.
The consolidation case looks a lot like the end of the week did, with SPY oscillating around the 10 DMA until an upside or downside catalyst forces it to move in one direction or another.
Should this happen keep an eye on the 10 DMA which is climbing higher towards SPY’s price.
To the downside, SPY closed the week just above a historic Seller zone from the past ~3 years ($675-679.99).
While they are currently in a strong Buyer zone, they are also near a market extreme & have not seen much downside testing at these price levels, making that ratio prime to be diluted, which would also signal a breakdown of the support of the 50 day moving average.
If this happens, the $671.96/share level will be imperative, as if it too breaks down then SPY’s next two support levels reside in Seller zones historically, which may lead to a broader selloff that possibly sees that $648.93/share level break down.
SPY has support at the $682.94 (Volume Sentiment: Buyers, 6.23:1), $677.10 (50 Day Moving Average, Volume Sentiment: Sellers, 1.28:1), $671.96 (Volume Sentiment: Buyers, 1.4:1) & $659.26/share (Volume Sentiment: Sellers, 1.55:1) price levels, with resistance at the $684.85 (10 Day Moving Average, Volume Sentiment: Buyers, 6.23:1), $687.67 (Volume Sentiment: Buyers, 3.4:0*) & $691.66/share (Volume Sentiment: NULL, 0:0*) price levels.
QQQ, the Invesco QQQ Trust ETF declined -1.73% last week, as the tech-heavy index was the least favored of the major four indexes.
Their RSI is trending down below the 50 Mark & currently is at 47.23, while their MACD is bearish.
Volumes were -15.62% below the prior year’s average (41,100,000 vs. 48,710,996), which shows that folks weren’t overly eager to sell, but given each day’s session resulted in declines it does not paint a rosy picture.
QQQ’s week looked very similar to SPY’s, leading off Monday with a low volume gap down session that closed as a doji, indicating a lack of enthusiasm & more of a wait & see approach heading into the holiday shortened week.
Tuesday looked the same, with a lower volume gap down open that amounted to market participants taking a wait & see approach heading into 2026.
Wednesday the year’s final session produced further declines on higher volume, signaling that there was signs of fear creeping into the market for the tech-heavy index.
Friday 2026 began with a decline of -0.19% for QQQ following the breakdown of their 10 day moving average’s support on Wednesday, heading into the weekend & closing below it for a second straight day.
Heading into this week there will be a focus to the upside on the $624.06-625.52/share zone, the latter of which is the most recent resistance level that occurs in a series of three consecutive inabilities for QQQ to break higher.
Should those two levels break down, $628.40/share is the next highest important resistance level, gatekeeping for the all-time high of $636.19/share which occurred in late October of 2025.
In order to break above the ATH there will need to be increased advancing volume that is sustainable in order to prove that there is solid belief behind the strength of the tech-heavy index.
The consolidation case looks similar to what we’ve been seeing now for the past couple of months, with QQQ oscillating around the 10 & 50 day moving averages awaiting an upside or downside catalyst.
This looks likely given how for months now it has been occurring & there are lower highs being made, while lows have been somewhat all over the place.
To the downside, watch the $612.39/share level, as should that break down there are two more Buyer dominated zones historically speaking below it, but no support levels in them, which makes it all the more likely that we see tests of the next three support levels (outlined below).
Should these break down the big test that all eyes will need to be on is the $579.99/share range, as should that break down we may see further downside action.
QQQ has support at the $612.39 (Volume Sentiment: Buyers, 1.04:1), $599.51 (Volume Sentiment: Sellers, 1.45:1), $597.90 (Volume Sentiment: Sellers, 1.45:1) & $589.37/share (Volume Sentiment: Sellers, 1.31:1) price levels, with resistance at the $615.74 (50 Day Moving Average, Volume Sentiment: Buyers, 1.22:1), $618.15 (10 Day Moving Average, Volume Sentiment: Buyers, 1.22:1), $624.06 (Volume Sentiment: Buyers, 1.23:1) & $625.52/share (Volume Sentiment: Buyers, 2.75:1) price levels.
IWM, the iShares Russell 2000 ETF dropped -1.05% for the week, as the small cap index had the second worst week of the four majors.
Their RSI just crossed above the neutral 50-mark & is currently at 50.72, while their MACD is bearish.
Volumes were -13.89% lower than the prior year’s average (30,455,000 vs. 35,366,494), indicating that there was a bit of selling with caution & somewhat a wait-and-see approach to the year end/new year.
Monday IWM opened lower & declined into weak volume -0.61%, forming a gravestone doji, signaling that there would be more weakness into the end of 2025.
Tuesday that trend continued, temporarily opening higher, but sinking lower on the lowest volume session of the week, where for the second straight day the resistance of the 10 day moving average walked IWM lower.
Wednesday featured more of the same on the last trading day of 2025, but with more volume as folks were either quick to take profits for the year off of the table & or were beginning to become more skittish.
Friday the new year kicked off with a bang for IWM, as they opened higher, tested lower, but for a second consecutive session the strength of support of the 50 day moving average held up & pushed IWM higher to close +1.06% for the day.
Heading into the new week, the upside case for IWM revolves around whether or not the medium-term trendline (50 DMA)’s support can outmatch the resistance of the short-term trendline (10 DMA).
If it can, watch the $251.92/share level for clues as to whether a bearish head & shoulders pattern has emerged, or if there may be a run at their all-time high.
The consolidation case features more oscillations between/around the 10 & 50 DMA’s, awaiting an upside or downside catalyst to start a fresh trend.
The downside case shows lots of support levels below that have strong historic Buyer:Seller sentiment, but any breakdown in SPY, QQQ or DIA may trigger outflows from IWM, but there are numerous support levels to fall back onto for the small cap index.
IWM has support at the $247.64 (Volume Sentiment: Buyers, 1.32:1), $245.55 (Volume Sentiment: Buyers, 1.32:1), $245.46 (50 Day Moving Average, Volume Sentiment: Buyers, 1.32:1) & $239.96/share (Volume Sentiment: Buyers, 1.57:1) price levels, with resistance at the $250.21 (10 Day Moving Average, Volume Sentiment: Buyers, 4.67:1), $251.92 (Volume Sentiment: Buyers, 4.67:1) & $257.34/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.
DIA, the SPDR Dow Jones Industrial Average ETF dipped -0.7% for the week, faring the strongest of the major index ETFs, as the blue chip names prevailed.
Their RSI is at 56.53 trending higher, while their MACD is bearish.
Volumes were -2.47% lower than the previous year’s average (4,177,500 vs. 4,283,347), mostly on account of Friday’s advancing session.
Monday the week began with DIA opening lower, testing a bit to the upside & a bit to the downside, but closing down -0.5% on low volume.
Tuesday opened just higher, before proceeding to sink lower to test the support of the 10 day moving average which held up.
Wednesday saw DIA open slightly higher, only to retreat throughout the session & close below the 10 day moving average on a third straight day of declines with lackluster volume, indicating a sense of complacency among investors in the blue chip index.
Friday made for an interesting start to the new year for DIA, as they opened higher, retraced to Wednesday’s low & then kept declining, before powering higher on high volume to close +0.64% for the first day of the year.
Part of that high volume is explained by the wide range of pricing that DIA traded at for the day, but DIA managed to close just above the support of the 10 DMA.
That support is going to be what the base upside case is built upon, as if it holds up & manages to pump DIA higher their only resistance level is their all-time high, which will have a support levels chasing the price at, increasing the odds of a new ATH occuring.
This will also require more advancing volume to be treated as sustainable price gains.
The consolidation case involves DIA oscillating around the 10 day moving average, awaiting an upside or downside catalyst.
To the downside, there is a lot of Buyer sentiment in the price zones below DIA’s closing price for Friday, which is to be expected given its the blue chip index just below its all-time high.
The primary downside target here will be the 50 DMA & to see how strong it provides support against a decline.
The reason being is that should it break down & DIA decline through it, the $468.61/share level is then the gatekeeper to a Seller zone ($464-467.99/share), and aside from $463.27/share, there are no other support levels offering historic Buyer sentiment protecting from further declines when DIA crosses into three consecutive Seller oriented zones ($448-459.99/share).
The table below offers more insight into historic volume sentiment around DIA.
DIA has support at the $483.47 (10 Day Moving Average, Volume Sentiment: Buyers, 0.8:0*), $482.73 (Volume Sentiment: Buyers, 0.8:0*), $478.74 (Volume Sentiment: Buyers, 0.8:0*) & $474.90/share (50 Day Moving Average, Volume Sentiment: Buyers, 1.19:1) price levels, with resistance at the $488.60/share (ALl-Time High, Volume Sentiment: NULL, 0:0*) price levels.
The Week Ahead
Monday the first week of the year begins with ISM Manufacturing Index data at 10 am & there are no earnings reports scheduled for release.
Fed President Barkin speaks on Tuesday at 8 am before S&P Final US Services PMI data comes out at 9:45 am.
AngioDynamics reports earnings before Tuesday’s open, before AAR & Penguin Solutions report after the closing bell.
Wednesday morning begins with ADP Employment data at 8:30 am, followed by ISM Services Index, Job Openings & U.S. Factory Orders data at 10 am.
Albertsons, Apogee Enterprises, Cal-Maine Foods, MSC Industrial & UniFirst all report earnings before Wednesday’s open, before Constellation Brands, Applied Digital, AZZ, Jefferies & PriceSmart report following the session’s close.
Initial Jobless Claims, U.S. Trade Deficit & U.S. Productivity data come out Thursday at 8:30 am, before U.S. Consumer Credit data comes out at 3pm.
Thursday opens with Acuity, Commercial Metals, Helen of Troy, Lindsay, Neogen, RPM, Simply Good Foods & TD Synnex reporting earnings, followed by Greenbrier & WD-40 after the closing bell.
Friday the week winds down with U.S. Employment Report data at 8:30 am, before U.S. Unemployment Rate, U.S. Hourly Wages, U.S. Hourly Wages Year-over-Year, U.S. Housing Starts & UMich Consumer Sentiment data come out at 9:45 am & Fed President Barkin speaks at 1:35 pm.
Conagra, Lamb Weston, Paychex & Winnebago all report earnings Friday morning before the opening bell.
See you back here next week!
*** I DO NOT OWN SHARES OR OPTIONS CONTRACT POSITIONS IN SPY, QQQ, IWM OR DIA AT THE TIME OF PUBLISHING THIS ARTICLE ***