Weekly Outlook 01/19/26
Trump Greenland tariffs, smallcap continues to outperform, while tech rotates from software into semiconductors and datacenters
Market Recap
IWM 0.00%↑ continued to outperform during the week, reinforcing its leadership role, while QQQ 0.00%↑ remained stuck in a volatility contraction pattern, continuing to make higher lows but without a decisive breakout.
Software stocks were broadly sold, reflecting ongoing multiple compression and rotation away from the group, which I covered in more detail in my article on X.
In commodities, silver pushed to new highs before pulling back later in the week as geopolitical tensions with Iran eased after Trump stated there would be no strike.
On the macro front, the Supreme Court tariff ruling that had been scheduled for Wednesday was delayed once again, while CPI data came in cooler than expected, helping to support risk assets.
Over the weekend, however, new tariff headlines emerged, with President Trump announcing a 10 percent tariff on several European countries beginning February 1st, set to rise to 25 percent by June 1st unless the US reaches a deal related to Greenland, adding another layer of uncertainty for markets heading into the coming week.
Despite Monday being a market holiday, futures remained open and NQ gapped down -1%. From a technical perspective, price traded directly into the prior low near 25,265 and managed to bounce off those levels throughout the session. That area represents the last higher low in the trend and now acts as an important pivot, as a clean break below it could open the door to a deeper pullback, especially with price currently trading beneath the 50 day simple moving average. Outside of equities, both gold and silver continued to push higher, extending their recent strength despite the weakness seen in index futures.
Watchlist
Sector and theme leaders continue to rally to the upside across multiple groups despite overall index weakness in large cap tech.
The space sector remains a strong leadership theme.
ASTS 0.00%↑ broke out after being named a prime contract service provider by the Missile Defense Agency (MDA).
RDW 0.00%↑ continues to trade exceptionally heavy volume as it breaks out above the 200 moving average.
RKLB 0.00%↑, PL 0.00%↑ and LUNR 0.00%↑ continue to print new highs.
In semiconductors, the memory space remains dominant, with MU 0.00%↑ and SNDK 0.00%↑ continuing to make new highs and leading sector momentum.
Within power infrastructure, BE 0.00%↑ and SEI 0.00%↑ are breaking out to new highs as demand for grid stability and energy storage accelerates.
AI infrastructure and datacenters are also showing leadership.
RIOT 0.00%↑ saw roughly 3x average volume after announcing it secured 700 MW of capacity and signed a 10-year AMD 0.00%↑ lease at Rockdale, marking a major pivot toward data center infrastructure.
GLXY 0.00%↑ broke out following news that Galaxy Digital completed a large load interconnection study and received ERCOT approval for an additional 830 MW of computing demand at its Helios data center campus in West Texas.
On the technical side, APLD 0.00%↑ continues to hold its 10 EMA within a strong uptrend, while CRWV 0.00%↑ made a sharp rally off its recent consolidation. IREN 0.00%↑ and NBIS 0.00%↑ continue to trend higher and remain constructive.
Some software stocks could continue to see downside after breaking fresh technical levels, with PLTR 0.00%↑ and APP 0.00%↑ remaining vulnerable.
Other software names have been selling off for an extended period and could be setting up for a reflexive bounce if downside extends further, including TEAM 0.00%↑ and NOW 0.00%↑.
Precious metals continue to be on watch as silver SLV 0.00%↑ continues its parabolic ascent. On the rare earths minerals side some stocks like USAR 0.00%↑ are approaching breakout levels:
IBRX 0.00%↑ saw huge volume and has exploded 200% off lows from $2 to $6 in Fridays afterhours session, after gaining attention on the X platform as well as having a large short interest of 35% float short. The stock is on watch for a mean reversion short trade when the momentum turns.
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Good read on the data center infrastrucutre rotation. The point about RIOT pivoting to datacenters with that 700 MW capacity is intresting considering the broader shift away from crypto mining. I've noticed in my own tracking that these power-heavy pivots usually signal longer-term trends rather than short-term trades. Wonder if the software selloff is over-extended tho given how fast the muhltiple compression happened.