The Week Ahead 1/19/2026

Tariffs, Traps, and Technicals

This weekend we have seen no shortage of drama coming out of the White House in Washington. Greenland, tariffs on EU, War between Powell and Trump, NYSE going on the blockchain, and just a popcorn level amount of news dropping it seems every hour. Overall, it was classic Trump-era volatility weekend. With a three day weekend, nothing worse than be over leveraged when this type of news starts dropping. Thankfully, we were a step ahead and remain in a good position early on in the year.

In the previous report we discussed risk out there in the market, the data shows it over and over again. The question always comes back to how do you capitalize on it? Lets take a look at the charts.

Financials pulled back this past week after some news dropped from Trump regarding limiting interest on credit cards to < 10% and a slew of earnings releases. When I look at my indicators, I am not shorting before the Sell Zones. But, often when it gets near it, I want to be locking profit in the sector it involves. In this case it would have been financials, greed can be costly.

This upcoming week we have Netflix earnings to kick things off Tuesday afternoon. Later in the week, I am eyeing Intel earnings.

I can tell you first impression when I look at the NFLX chart is I don’t want to be short into earnings. The weekly and daily timeframes are extended to the downside already. If anything, it may help the index’s rally short term. That doesn’t mean it won’t crater after earnings, it just tells me I don’t want to bet on that move. A strong dip in the market on Tuesday could be a “short term” bear trap.

For the Economic Calendar we have PCE, Jobless Claims, and any random event from the White House that may come out.

Index’s

Small caps have been outperforming to start the year but a pullback is highly likely at this point. Data from Subutrade here shows the Russel has averaged a negative return over the following week when up 11 days in a row. I shared the lotto IWM puts trade before close on Friday

That doesn’t mean I think small caps can’t continue to outperform. But, I like to set the odds in my favor, and being long here just doesn’t seem like the best setup. I think IWM can pull back to 250-245 range in Q1 at some point.

For the SPY and Q’s I have been sharing data pointing to now being a time to be more cautious, not be greedy, keep it simple, as I think odds are high for a correction in Q1. Should that happen, the best long setups will be there for the taking. Until then let the flow and price action show the way. Last week I wrote about how we are entering the time period where the VIX read that hit in December, can start coming into play. This weekend and past week has created lots of uncertainty, markets don’t like uncertainty, it creates chaos, but that chaos creates opportunities for those who are prepared.

The past few weeks I have shared reasoning and data why I don’t want to be over aggressive at these levels, here are two more below.

Overbought Read #1

Overbought Read #2

I think a strong dip / correction will get bought but I plan to let it come to me. Mid term years are volatile, I highly encourage new readers to go back and look at the past few “Week Ahead” updates, the data is compelling for volatility to rise.

For now, how to play it? Keep it simple, embrace the chaos and be patient for the best setups. The Midterm Seasonal Pattern below can help give a good read for where setups might be. If we see a VIX spike into early February, that could be a good swing spot into April. Markets never follow these patterns completely but when combined with the other data and evidence, it can reduce getting caught in traps in either direction.

Crypto

Will the four year cycle not work this time? For now, I will let the market prove me wrong. I don’t want to be short or long here, but if the setup presents itself I will share with our paid subscribers.

Setups I’m Watching this Week

ServiceNow Inc (NOW)

Data suggest a gap down on Tuesday is a strong buy and just happens to currently be at the 2024 lows that held as strong support previously

Apple (AAPL)

Great data from Nautilus Research suggest we could see one more negative week, it also shows a potential buy the dip setup.

Final Thoughts

Embrace the volatility and stay nimble here. We have started strong to the year but now is not the time to chase. My previous top trade idea’s for Q1 2026 continue to work well and I believe that will continue. My paid subscribers get access to my favorite idea’s each week, if you are curious in joining, feel free to reach out anytime. I’ll leave you with my two favorite charts of the week, cheers!