Playing out to the letter

The S&P 500 and Nasdaq actually saw a lot of selling on Friday, despite the earlier pumping – which has increased interest in capturing those capital gains in the new year, as the higher the price, the greater the incentive to cash in as the final two-hour decline on Wednesday was steep. It was simply too good an opportunity to pass as the 6,936 resistance level was reached again near the opening bell.

Does this mean we are in for a bad year for stocks? Not necessarily – AI is not in a bubble (no one needs to debate whether we are in a bubble or not – if we were, there would be a chorus of “this time is different” and there is no doubt that the days ahead will be brighter), profits are good and will drive multiples up (earnings rise first, then confidence drives multiples) so it should not be taken advantage of, and show me a bear/recession market where financials and retail traders do it well.

Will things change? Certainly, 2026 will be a leaner year than the previous two years, and there are no clear double-digit gains. A serious correction will come, but we are still in the early days of the year.