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MarketSurge powers the charts in this video.

It is no news that small caps tend to outperform in early January. It has happened again this year. Russell 2k (IWM) tested its 50-day moving average on January 2nd, and then it went straight up, making a new all-time high. Also, not surprising – the big lift came from sectors that lagged last year – energy, financials, and beaten down groups like nuclear, robotics, crypto, space, rare earth metals, etc. This basically happens in the first few weeks of almost every year. 

The large-cap indexes, QQQ and SPY, are lagging behind small caps but are also near or at new all-time highs. 

AMZN is pushing higher in anticipation of the Supreme Court decision on tariffs. SHOP might also benefit alongside other retailers. After a brief consolidation, GOOGL broke out to new all-time highs. TSLA tested its 20-week moving average, where it found support. NVDA pulled back to its 20-day moving average, where buyers stepped in. Both are lagging the market indexes but are likely to set up at some point if the market remains strong. 

Memory chip stocks started the new year just like they finished the previous one – leading the market. SNDK is up 800% since last August. MU is only up 200% for the same period.

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MarketSurge powers the charts in this video.

The first trading day of 2026 offered a wide variety of action. Big tech stocks gapped up and then sold off, while the small-cap index Russell 2k (IWM) found support near its 50-day moving average and finished strong. This could be the foundation of the January effect, which benefits small caps. 

Unlike the rest of tech, semiconductors, which are the backbone of the AI revolution, had a strong start to the new year. SMH gained 4% to finish near its all-time highs. Memory stocks like Micron (MU) and Sandisk (SNDK) gained more than 10%. BIDU is not known as a semiconductor stock, but it actually owns Kunlunxin, which is a leading TPU chip manufacturer in China, and it is expected to go public in 2026. BIDU gained 14% on Friday, and it is currently the strongest Chinese stock.

The real bottleneck in AI is not processing power but electric power. The start of the new year saw strength in a large array of energy stocks. CEG, which is a top natural gas and nuclear play, gained 4%. GEV, which provides grid solutions and power-generation systems, bounced near its 20-day simple moving average and gained 3%. Bloom Energy (BE) designs and manufactures “energy servers” that use an electrochemical process to convert fuels—such as natural gas, biogas, or hydrogen—into electricity without combustion. Their systems provide a “plug-and-play” solution that allows businesses, particularly AI data centers, to bypass traditional grid interconnection delays. BE bounced near its 20-week moving average and gained 13% on January 2nd. Other energy plays like TLN, NRG, and BWXT also had hefty gains. 

Solar also had a strong start to the year. The solar ETF, TAN, gained 5% in one day, boosted by strong performance in FSLR, CSIQ, ENPH, SEDG, JKS, SHLS, etc. I’ve said it here before – at 5 cents per kWh, solar is by far the cheapest source of electricity. China knows that and installed 300 GW in 2025. The US is expected to install 300GW of solar in the next five years. 

In other words, AI remains the top market theme at the start of 2026. The difference this year is that the wave is not lifting all boats – some are sinking, some are treading water, but select few in the semiconductors and energy space are pushing higher. 

I wish you a happy and very successful 2026!

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Disclaimer: Everything I share is for educational and informational purposes only, and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

The main stock indexes started the year near all-time highs and are about to finish the year near all-time highs. A lot happened in between. The first quarter was marked by a big selloff in AI-related stocks, followed by a tariff war correction that hit the entire market. The Nasdaq 100 declined 26% in seven weeks. This ended up being the best buying opportunity since late 2022. The triple-leveraged Nasdaq 100 ETF, TQQQ, tripled from there. Stocks that showed relative strength during the pullback, like HOOD, PLTR, and NVDA, recovered quickly above their 50-day moving average and remained leaders for the rest of the year. The 2x leveraged Robinhood ETF, ROBN, went up almost 20x in seven months. This is why I like to say that the best entry opportunities often come after sizable market drops. 

The bull market was back in full force by May. AI datacenter stocks like CRWV and quantum computing stocks like QBTS more than tripled in a few weeks. Crypto woke up for a brief moment. Ethereum doubled between July and mid-August. Then, gave up all of those gains in the rest of the year. Then came September, which became the hottest month for speculative momentum stocks. Everything doubled or tripled in a short period of time – quantum computing, rare earth metals, space-related stocks. Most of those short-term rocket moves round-tripped in October and November, but momentum didn’t leave the market. It simply found a new home – precious metals. Gold, silver, and platinum went parabolic. 

As 2025 is coming to an end, the most frequent question I receive is about my predictions for the new year. What groups will be hot? I have no idea. I assume the same trends will persist in Q1. Memory chip stocks like SNDK went up 6x between September and November and barely pulled back, effectively building another base. This tells me they are being accumulated, so stocks like SNDK and MU might have more fuel left in the tank. Plenty of other stocks are acting constructively and setting up as well – SHOP, AMZN, BIDU, TSLA, NVDA, ALAB, RKT, etc.

I wish you a happy and very successful 2026!

Try my subscription service, which includes a Discord room and private X feed with options and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. See how my ideas/alerts performed.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only, and it should not be considered financial advice. Read my full disclaimer here.