January 5, 2026

(WELCOME TO 2026 – AN EVENTFUL YEAR LIES AHEAD)

01/05/2026

Hello everyone

Welcome to 2026. Hope you all had an enjoyable holiday break and are well rested.

WEEK AHEAD CALENDAR

CES 2026 running from Jan. 6-9

Tech show in Las Vegas, Nevada

Monday, Jan.5

Tuesday, Jan 6

Wednesday, Jan 7

8:30 a.m. U.S. International Trade in Goods and Services (November)

Earnings: Constellation Brands

Thursday, Jan. 8

8:30 a.m. Productivity and Costs (Q3)

Friday, Jan 9

8:30 a.m. December Jobs Report

8:30 a.m. Housing Starts (September, October)

8:30 a.m. Building Permits (September, October)

8:30 a.m. New Home Sales (September, October)

The tone for 2026 could be decided in the month of January. Today, investors are back at their trading desks. There is a mix of optimism and caution about the economic landscape ahead. Most banking analysts are predicting another double-digit advance in 2026. But some range trading could be a major theme this year after the huge AI run-up of the last three years.

The early days of the year will give us some insight. The January Barometer devised in 1972 by Yale Hirsch – who popularized the old Wall Street adage, “As goes January, so goes the year” – has had an impressive track record: an 84% accuracy ratio. 2025 is an example here – The S&P500 rose 2.7% in January. This rally was followed by three straight months of declines before the broad market index staged a major comeback, ending the year up more than 16%.

Interestingly, the Santa Claus rally failed to materialize. It typically shows up in the last five trading days of one year, and the first two of the next. The start of the year is looking shaky; however, the S&P500 did manage to close higher on the first trading day of the year last Friday. This week, the market must navigate and digest developments at a major tech conference and the latest jobs report.

By many metrics, the S&P 500 is extremely overbought. And many risks are evident. Despite this, we can point to positives: the stimulus from the Big Beautiful Bill Act, the possibility of lower interest rates from a more dovish incoming Fed Reserve chair, and the benefits from AI building out the real economy.

The Jobs Report is expected to show that a total of 65,000 jobs were added, according to FactSet. The unemployment rate is expected to have dipped slightly to 4.5% from 4.6%. Watching the labour market this year will be key. Although the U.S. economy is forecasted to expand by more than 2% this year, the narrative may become particularly gloomy if the unemployment rate rises past 5%. Such an unfolding pattern could whack equities quite cruelly.

Rising unemployment could leave the AI story vulnerable. If growth worries permeate the landscape, it would be reasonable to argue that not many sectors will be able to withstand the harsh headwinds.

The CES tech show takes place from Jan. 6-9 in Las Vegas, Nevada. It will showcase the future of AI, robotics, and digital health.

What has investors on edge is the massive amount of companies that are spending on AI. The main sentiment is: is it worth it, and will we see the benefits in the short to medium term? What we need to understand is that not everyone will be successful with AI. There will be winners and losers.

MARKET UPDATE

S&P500

Using the Fib. Retracement analysis, which I have taken from an approximate topping out at ~7100, we can see the 50% Fib sits around 6000 on the SPX, and the 0.618% Fib sits around 5,700. What I have drawn is a pattern we could see play out this year. A push higher in January /February would be a place to start thinking about sell orders in the SPX. If you are long-term focused and have a portfolio, you can either begin to take some profits, or leave it untouched as I expect another bullish rally in the fall (Q4), (you could add at the bottom), and/or you can buy protection – that is, buy puts or put spreads. The dark line I have drawn across the chart shows a support/resistance zone. This area was previously resistance in mid-2025 and should now act as a support area on any market correction.

In the short-term, we could see more wide-ranging and even new highs in the market before a larger downside is seen. There is no confirmation yet that a significant top has formed. A topping formation can take a while to play out. Be patient and wait for a good entry.

I’ve also drawn lines across this chart to highlight the formation of what appears to be a rising wedge/reversal pattern. We should eventually break to the downside as this pattern plays out.

This pattern showing possible price action for the year is not set in stone; rather, technical analysis/future projections is /are designed to show you what may happen based on probabilities around market structure, trend, price action, risk, momentum, sentiment, etc.

As we are all aware, macro events, fundamentals, & price action can alter the probability of any landscape. There are no certainties, only measurements based on data in front of you at the time.

Resistance = 6946, 6970 ~

Support = 6850,6705~

GOLD

Currently, there is no confirmation of a near-term top, and with the geopolitical turmoil surrounding Venezuela, the metals have seen a strong surge this morning (Australian time). There is scope for gains toward the highs -$4550 – and even beyond that area. The big picture is still suggestive of a multi-month peak forming in the near-to-medium term.

Resistance= 4400, 4440~

Support = 4320, 4230

BITCOIN

Bitcoin is still amid a very tight ranging pattern, which is seen as corrective from the October peak at 126k~.

To see downside toward 80k and below, we need to see some decline in the short term; otherwise, this tight ranging pattern we have seen could be suggestive of a significant bottom.

To confirm a more significant upside break, we need to see a close above 105k+.

Resistance = 91k, 94.7k and ~97.5k

Support = 96k, 83.8k~

STOCKS

Focus here is on Aussie stocks today. (ASX)

Bullish on

Broken Hill Proprietary LTD (BHP)

Target = 52.36 or higher

Invalidation Point = 43.96 (Price must remain above this area)