Charted Market Insights - Jan. 21, 2026

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Charted Market Insights - 20 Jan 2026 - The rundown after a gap lower for the SPX.pdf Download PDF • 4.42MB

The rundown after a gap lower for the SPX

SPX: Gap lower invalidates tactical breakout

Another round of tariff rhetoric from President Trump triggered a sharp selloff in U.S. equities, with Tuesday’s (1/20) gap lower invalidating the S&P 500’s tactical breakout. The decline pushed the index below initial support at its rising 13-week moving average and the January 2 low (6829–6824). This week’s opening downside gap at 6871–6886, along with the wider daily gap from 6871–6925, should act as overhead resistance ahead of the 6986.33 all-time high. With near-term support broken, downside risk shifts to the mid-December low and rising 26-week moving average near 6720-6687, followed by more critical 2026 support at the October–November “Trump tariff tweet” and post-NVDA earnings lows at 6550–6521, reinforced by the rising 40-week moving average near 6444.

Several indicators and indices in a position of strength prior to Tuesday’s decline

Prior to Tuesday’s drop in the U.S. equity market macro indicators such as the Chicago Fed Financial Conditions index and U.S. high yield option adjusted spread confirmed last week’s high on the SPX. In addition, the NYSE Composite showed a broad-based rally given new highs for the advance-decline (A-D) and volume A-D lines as well as strength for 52-week highs relative to 52-week lows (Jan 16 The Chart Check). On a relative basis, small caps remain bullish vs. large caps (IWM/SPY), S&P 500 equal weight remains bullish vs. the SPX (RSP/SPY), and emerging markets are strengthening and breaking higher from a head and shoulders bottom vs. the U.S. (EEM/SPY).

Several indices and indicators in a position of weakness prior to Tuesday’s decline

The Roundhill Magnificent Seven ETF (MAGS) lost leadership and broke down from a H&S top vs. the SPY (Jan 9 The Chart Check). This relative breakdown is a potential bearish leading indicator for an absolute price breakdown on MAGs. The U.S. (SPY) is at risk relative to MSCI EAFE (EFA) entering 2026 after a lackluster April-October 2025 rebound for SPY vs. EFA. Unlike breadth on the broad-based NYSE, the A-D lines on the NDX have struggled with the risk for tactical H&S topping patterns. Finally, the H&S bottom for the 30-year Treasury Yield Index (TYX) remains intact with risk 50.00 (5.0%). TYX gapped higher (weaker bonds) as the SPX gapped lower yesterday.

Gold tests its 4890 target with an eventual move to 5176 not ruled out

Gold futures have tested a pattern breakout target at 4890 (Dec 26 Charted Market Insights). Today’s session low at 4761 offers a tactical risk management support ahead of new chart supports at prior highs from mid January and late December at 4650 and 4584, respectively. Holding above these levels would keep the immediate pattern bullish with the next upside target on gold futures at 5176 (100% extension of the May-October 2025 rally projected from the late October low). Rising daily moving averages (4570-4390) underpin gold’s bullish tactical trend.

Silver tests big base target zone from 85 to 95 but tactical potential to 106

Silver confirmed “the mother of all cup and handle patterns” on November’s decisive rally above the 2011 and 1980 peaks at 49-50 (Oct 21 Charted Market Insights). This 46-year cup and handle projects silver into the 85 to 95 zone, which silver has achieved in early 2026. Tactically speaking, silver futures broke out from a late December-mid January bullish cup and handle with upside potential to 95-96, which silver futures have tested, and potentially higher toward 106 (100% extension target). In our view, holding above the 86 area would keep silver positive.

S&P 500

SPX: Gap lower invalidates tactical breakout

Another round of tariff rhetoric from President Trump triggered a sharp selloff in U.S. equities, with Tuesday’s (1/20) gap lower invalidating the S&P 500’s tactical breakout. The decline pushed the index below initial support at its rising 13-week moving average and the January 2 low (6829–6824). This week’s opening downside gap at 6871–6886, along with the wider daily gap from 6871–6925, should act as overhead resistance ahead of the 6986.33 all-time high. With near-term support broken, downside risk shifts to the mid-December low and rising 26-week moving average near 6720-6687, followed by more critical 2026 support at the October–November “Trump tariff tweet” and post-NVDA earnings lows at 6550–6521, reinforced by the rising 40-week moving average near 6444.

Chart 1: S&P 500 (SPX): Weekly chart

Source: Optuma, Suttmeier Technical Strategies

VIX3M vs. VIX: Technical sentiment gets more fearful but not yet at panic levels

From a sentiment perspective, the 3-month VIX relative to the VIX is a sentiment indicator that shows increasing tactical fear on the drop to 1.06. Mild oversold spikes below 1.0 suggested tactical panic and provided tactically bullish signals in mid October and late November (Jan 20 Straight from the Chart).

Chart 2: S&P 500 (top) and the 3-month VIX relative to the VIX: Daily chart

Source: Optuma, Suttmeier Technical Strategies

NASDAQ 100

NDX: Key supports at 24,693-24,647 and 23,850-23,621

Unlike the SPX, the NASDAQ 100 (NDX) did not achieve new all-time highs entering 2026. Yesterday’s weakness broke initial support at 25,305-25,086 (13-week moving average (WMA) and early January low) to expose the next support at 24,693-24,647 (rising 26-WMA and mid December low) and key 2026 support at 23,850-23,621 (late November low and rising 40-WMA). The January, December, and October highs offer resistance at 25,835-26,182.

Chart 3: NASDAQ 100: Weekly chart

Source: Optuma, Suttmeier Technical Strategies

Position of strength

Several indicators and indices in a position of strength prior to Tuesday’s decline

Prior to Tuesday’s drop in the U.S. equity market macro indicators such as the Chicago Fed Financial Conditions index and U.S. high yield option adjusted spread confirmed last week’s high on the SPX. In addition, the NYSE Composite showed a broad-based rally given new highs for the advance-decline (A-D) and volume A-D lines as well as strength for 52-week highs relative to 52-week lows (Jan 16 The Chart Check). On a relative basis, small caps remain bullish vs. large caps (IWM/SPY), S&P 500 equal weight remains bullish vs. the SPX (RSP/SPY), and emerging markets are strengthening and breaking higher from a head and shoulders bottom vs. the U.S. (EEM/SPY).

Fed financial conditions index confirm the higher highs on the SPX into early 2026

Unlike entering 2022, which was the last mid-term election year, 2026 starts off with bullish confirmation from the Chicago Fed National Financial Conditions Index.

Chart 4: S&P 500 (SPX) (top) and Chicago Fed National Financial Conditions Index (NFCI) (bottom)

Source: Optuma, Suttmeier Technical Strategies, Federal Reserve Bank of Chicago via FRED®

A new cycle low for the U.S. High Yield OAS confirms SPX rally entering 2026

The U.S. High Yield option-adjusted spread (OAS) was at risk of breaking higher from a mid to late 2025 bottom that would have signaled rising credit stress and a risk-off backdrop for equities. Fortunately, that scenario has been avoided, as the high yield OAS has remained benign and constructive, narrowing to a new cycle low at 2.65 prior to Tuesday’s big drop for U.S. equities. This risk-on signal confirmed the equity rally and avoids a late-September to early 2026 negative divergence between credit and equities.

Chart 5: S&P 500 (top) and the U.S. High Yield option-adjusted spread (OAS) (bottom): Daily chart

Source: Optuma, Suttmeier Technical Strategies, Ice Data Indices, LLC via FRED®

Smalls caps begin 2026 with tactical leadership relative to large caps

IWM begins 2026 with tactical leadership relative to the S&P 500 (SPY). The weekly relative price chart for the IWM (small caps) versus the SPY (large caps) shows a breakout from a double bottom off of the April and August 2025 lows as well as a bullish retest of that breakout and positively shifting 26- and 40-week moving averages WMAs) in mid November. While above the 26- and 40-WMAs, IWM has potential for tactical leadership toward the declining relative price 200-WMA vs. SPY.

Chart 6: iShares Russell 2000 ETF (IWM) relative to the SPDR S&P 500 ETF (SPY): Weekly chart

Source: Optuma, Suttmeier Technical Strategies

RSP shows leadership on a breakout from a H&S bottom vs. SPY

The Invesco S&P 500 Equal Weight ETF (RSP) has broken out from a September into January head and shoulders (H&S) bottom relative to the SPDR S&P 500 ETF (SPY) (Jan 9 The Chart Check). This continues the leadership trend from the late October low for the RSP vs. the SPY and confirms a shift in U.S. equity market leadership to the “Average Joes” from the largest of S&P 500 stocks.

Chart 7: Invesco S&P 500 Equal Weight ETF (RSP) relative to the SPDR S&P 500 ETF (SPY)

Source: Optuma, Suttmeier Technical Strategies

2026: A confirmed shift to EM leadership vs. the U.S.

2026 could be the year for a sustained shift to leadership for emerging markets relative to the U.S. The iShares MSCI Emerging Markets ETF (EEM) is attempting to break higher from a 2-year head & shoulders (H&S) bottom relative to the SPDR S&P 500 ETF (SPY). Within this bottoming pattern, EEM has outperformed the SPY over the last year, but a decisive breakout from the H&S bottom in early 2026 would suggest a sustained shift to leadership for emerging markets after ~15 years of U.S. outperformance.

Chart 8: iShares MSCI Emerging Markets ETF (EEM) relative to the SPDR S&P 500 ETF (SPY): Daily chart

Source: Optuma, Suttmeier Technical Strategies

Position of weakness

Several indices and indicators in a position of weakness prior to Tuesday’s decline

The Roundhill Magnificent Seven ETF (MAGS) lost leadership and broke down from a H&S top vs. the SPY (Jan 9 The Chart Check). This relative breakdown is a potential bearish leading indicator for an absolute price breakdown on MAGs. The U.S. (SPY) is at risk relative to MSCI EAFE (EFA) entering 2026 after a lackluster April-October 2025 rebound for SPY vs. EFA. Unlike breadth on the broad-based NYSE, the A-D lines on the NDX have struggled with the risk for tactical H&S topping patterns. Finally, the H&S bottom for the 30-year Treasury Yield Index (TYX) remains intact with risk 50.00 (5.0%). TYX gapped higher (weaker bonds) as the SPX gapped lower yesterday.

MAGS at risk for an absolute price breakdown

Tuesday’s gap lower creates an overhang from 63.85 to 64.83 on MAGS and places the focus on big support at the late November low at 62.36. If the absolute chart follows the relative chart vs. the SPX lower, then MAGS breaks this level to confirm a September 2025 into early 2026 topping pattern with deeper risk to the rising 200-day moving average near 59 and the pattern count at 55.50. Even if MAGS fills Tuesday’s downside gap, there are chart resistances and deteriorating daily moving averages that could limit upside to the 65.31 to 66.99 range.

Chart 9: Roundhill Magnificent Seven ETF (MAGS) (top) and relative to the S&P 500 (SPX) (bottom): Daily chart

Source: Optuma, Suttmeier Technical Strategies

The U.S. is at risk relative to EAFE entering 2026

The U.S. (SPY) peaked relative to EAFE (EFA) in December 2024. While the long-term leadership trend for SPY vs. EFA from late 2007 remains intact, the U.S. at risk vs. EAFE entering 2026. The April 2025 low and August 2022 high provide big support for SPY vs. EFA, but the lackluster April 2025-October 2025 rebound for the SPY vs. EFA places this support at risk. A move below this support, which aligns with the rising 200-week moving average, would suggest a sustained loss of U.S. leadership and a period of relative strength for EAFE (international equity markets outside of North America).

Chart 10: SPDR S&P 500 ETF (SPY) relative to the iShares MSCI EAFE Index Fund ETF (EFA): Weekly chart

Source: Optuma, Suttmeier Technical Strategies

NDX A-D lines: Bullish leading indicator on new highs but now at risk for H&S tops

New highs for the NDX A-D line and volume A-D line into late December provided a bullish leading indicator for the NDX, but the NDX has so far failed to rally to new highs with these A-D lines now at risk for a December-January head and shoulders tops.

Chart 11: NASDAQ 100 advance-decline line (top) and volume advance-decline line (bottom): Daily chart

Source: Optuma, Suttmeier Technical Strategies

30-year yield (TYX): Bullish breakout and retest from H&S bottom points to 5%

The 30-year Treasury Yield Index (TYX) has held its breakout from its September into December H&S bottom pattern (Dec 2 Charted Market Insights). This keeps the H&S bottom intact with upside potential on the 30-year yield (lower bond prices) to 49.98-50.27 (the 5% area). Holding yesterday’s big upside gap at 48.92-48.43 keeps the immediate pattern bullish on TYX. Rising 13-, 26-, 40-, and 200-day moving averages from 48.47 down to 48.02 reinforce the positive pattern for TYX ahead of the H&S bottom breakout zone at 47.85-47.77.

Chart 12: 30-year Treasury Yield Index (TYX): Daily chart

Source: Optuma, Suttmeier Technical Strategies

Gold and silver

Gold tests its 4890 target with an eventual move to 5176 not ruled out

Gold futures have tested a pattern breakout target at 4890 (Dec 26 Charted Market Insights). Today’s session low at 4761 offers a tactical risk management support ahead of new chart supports at prior highs from mid January and late December at 4650 and 4584, respectively. Holding above these levels would keep the immediate pattern bullish with the next upside target on gold futures at 5176 (100% extension of the May-October 2025 rally projected from the late October low). Rising daily moving averages (4570-4390) underpin gold’s bullish tactical trend.

Chart 13: Gold futures: Daily chart with pattern breakout counts

Source: Optuma, Suttmeier Technical Strategies

Chart 14: Gold futures: Daily chart with Fibonacci retracements and extension levels

Source: Optuma, Suttmeier Technical Strategies

Silver tests big base target zone from 85 to 95 but tactical potential to 106

Silver confirmed “the mother of all cup and handle patterns” on November’s decisive rally above the 2011 and 1980 peaks at 49-50 (Oct 21 Charted Market Insights). This 46-year cup and handle projects silver into the 85 to 95 zone, which silver has achieved in early 2026. Tactically speaking, silver futures broke out from a late December-mid January bullish cup and handle with upside potential to 95-96, which silver futures have tested, and potentially higher toward 106 (100% extension target). In our view, holding above the 86 area would keep silver positive.

Chart 15: Silver (XAGUSD): Monthly chart with “the mother of all cup and handle patterns”

Source: Optuma, Suttmeier Technical Strategies

Chart 16: Silver futures: Daily chart with cup and handle and Fibonacci extension levels

Source: Optuma, Suttmeier Technical Strategies

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