Homebuilders, Crude Oil, and QQQ all break out to finish on a high note

Near-term Equity trends are bullish, and the week closed with a notable breakout in QQQ as both AAPL, TSLA rebounded while Semiconductor and Semi-cap Equipment stocks showed tremendous strength. Homebuilders also rallied as the Administration has begun to take action to combat affordability concerns for housing. Given that a decision on tariffs is expected early next week, I anticipate that any decision to roll back tariffs might have negative implications for the bond market as yields start to rally on the long end. Overall, January has gotten off to a good start with gains in the first five days of trading, along with broad-based strength from Equal-weighted SPX as both Healthcare and Transportation stocks broke out this past week. While breadth has risen slightly, it remains below levels thought important towards showing a complete comeback to the levels reached last Summer. For now, impressive broad-based US Equity strength is promising towards the idea of additional gains between now and late February as the “Magnificent 7” attempt to stage a comeback.  As relayed in recent days, it remains right to position in sector leaders like Industrials, Financials, and Technology with a renewed focus on Healthcare, given this week’s strength. 

Three important developments marked Friday’s trading to close the week on a broadly positive note:

  1. $QQQ finally closed up above 652.52, which exceeds the upper boundary of its triangle.
  2. Homebuilders strengthened materially on Friday, which served to aid Consumer Discretionary
  3. WTI Crude oil closed up above a downtrend stretching back since mid-summer 2025. While cycles point lower into February, my expectation is that Energy is gradually beginning to bottom out and ties in with my 2026 bullish view. 
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