Market Overview
It was a strong week for stocks with the consumer discretionary driving the Dow Jones Industrial Average and S&P 500 to new all-time highs. We even got a classical Dow Theory confirmation of this bull market (more on this below). The Dow Jones led the rally higher, finishing up 2.32%, while the S&P 500 was up 1.57%. The Nasdaq rallied 1.88%. Small caps also joined in on the party as the Russell 2000 outperformed its large cap peers. There are big rotations taking place underneath the surface as the tech sector struggles to regain its momentum. Let’s see if a Supreme Court ruling on tariffs can shake markets at all this week.
Stocks I Like
Archer Aviation (NYSE:ACHR) – 55% Return Potential
What’s Happening
- Archer Aviation Inc. (ACHR) is a leading developer of electric vertical takeoff and landing (eVTOL) aircraft designed for urban air mobility, creating safe, sustainable, and quiet flying vehicles for future air taxi networks, offering investors exposure to the rapidly growing advanced air mobility and electric aviation sector with a focus on innovation, certification progress, and commercial partnerships.
- The company had no revenue last quarter and lost $76.3 million.
- This valuation on ACHR is very high given its revenue situation. Its Book Value is just 2.25.
- From a technical point of view, ACHR is looking to breakout from a rounding bottom pattern. This would signal a new bull trend is underway in this stock.
Why It’s Happening
- Archer Aviation Inc. is on the cusp of transforming urban mobility with its Midnight eVTOL aircraft, poised for initial revenue generation as early as Q1 2026 from Middle East launch agreements in markets like the UAE and Saudi Arabia. This milestone marks the shift from development to commercialization, tapping into the burgeoning demand for efficient, eco-friendly air taxis in congested cities and creating a foundation for recurring operations in high-growth international corridors.
- Robust financial runway empowers Archer to execute its ambitious roadmap without immediate pressure, ending 2025 with over $2 billion in liquidity to fund ongoing certification efforts and production scaling. This strong balance sheet provides strategic flexibility amid regulatory timelines, allowing the company to pursue additional capital raises and partnerships while bridging to broader revenue streams in the evolving advanced air mobility ecosystem.
- Participation in the White House eVTOL Integration Pilot Program accelerates Archer’s domestic ambitions, with multiple city applications submitted and FAA selections expected in early-to-mid 2026. This federal initiative could enable early U.S. trials and operational integration, reinforcing Archer’s narrative as a leader in safely bringing air taxis to American skies and unlocking pathways to widespread adoption.
- Technological and regulatory progress positions Archer for key 2026 breakthroughs, including anticipated FAA type certification for the Midnight aircraft and advancements in test flights and production ramp-up. These milestones validate the company’s vertically integrated approach, building momentum toward full-scale commercialization and differentiating it in the competitive eVTOL landscape.
- This is a strong candidate for a short squeeze with nearly 14% of floated shares being sold short.
- Analyst Ratings:
My Action Plan (55% Return Potential)
- I am bullish on ACHR above $7.40-$7.50. My upside target is $13.50-$14.00.
Gilead Sciences (NASDAQ:GILD) – 24% Return Potential
What’s Happening
- Gilead Sciences, Inc. (GILD) is a leading biopharmaceutical company focused on discovering, developing, and commercializing innovative medicines in areas of unmet medical need, particularly in virology (HIV, hepatitis), oncology, and inflammation, offering investors exposure to the rapidly growing biotechnology and pharmaceutical sector with a focus on transformative therapies and a robust pipeline of antiviral and cancer treatments.
- The company had $7.77 billion in revenue during their last quarter, and printed $3.1 billion in earnings.
- Valuation is solid in GILD. P/E is at 18.31, Price-to-Sales is at 5.13, and EV to EBITDA is at 12.02.
- From a technical angle, GILD is coiling up tightly within an ascending triangle. This points to a continuation of the underlying uptrend.
Why It’s Happening
- Gilead Sciences Inc. dominates the HIV treatment market with its flagship Biktarvy driving consistent revenue growth, while extended U.S. exclusivity through 2036 secures a multi-billion-dollar cash flow engine amid rising global demand for effective antiviral therapies. This durable franchise provides a stable foundation, insulating the company from volatility and funding ambitious expansions in oncology and inflammation.
- Expanding oncology portfolio fuels Gilead’s diversification narrative, with Trodelvy gaining traction in breast and bladder cancers and recent acquisitions like Repare Therapeutics’ Polθ inhibitor adding clinical-stage assets to the pipeline. These strategic moves tap into high-unmet-need areas, positioning Gilead to capture growing share in the $200 billion+ global oncology market as data readouts and approvals materialize through 2026.
- Strong virology and inflammation pipeline promises multiple transformative launches, including long-acting HIV prevention options like lenacapavir and advancing TIGIT inhibitors in collaboration with partners. With over a dozen assets in development and key Phase 3 readouts anticipated in 2026, Gilead is building a bridge to sustained innovation beyond current blockbusters.
- Attractive dividend reliability enhances Gilead’s appeal as a defensive growth play, offering a forward yield around 2.6% with quarterly payouts supported by strong free cash flow generation. This consistent shareholder return policy, combined with no major patent cliffs until the mid-2030s, creates a compelling income-plus-upside story for long-term investors.
- Analyst Ratings:
- Morgan Stanley: Overweight
My Action Plan (24% Return Potential)
- I am bullish on GILD above $105.00-$108.00. My upside target is $150.00-$155.00.
SoFi Technologies (NASDAQ:SOFI) – 46% Return Potential
What’s Happening
- SoFi Technologies, Inc. (SOFI) is a leading digital personal finance company offering a comprehensive mobile-first platform for lending, banking, investing, credit cards, and wealth management services, providing investors exposure to the rapidly growing fintech and neobanking sector with a focus on innovative, member-centric financial solutions and technology-driven growth.
- The company had $949.63 million in revenue and $130.97 million in earnings in their last quarter.
- Valuation is a bit high in SOFI. P/E is at 52.29, Price-to-Sales is at 10.64, and Book Value 6.97.
- From a charting standpoint, SOFI is approaching the apex of the triangle formation. This signals a resolution is imminent, and since the trend is already up, the bias is to the upside.
Why It’s Happening
- SoFi Technologies Inc. is accelerating its transformation into a diversified digital financial powerhouse, with record Q3 2025 results showcasing 38% adjusted net revenue growth to $950 million and a shift toward capital-light segments comprising nearly half of revenue. This strategic pivot, including the launch of SoFiUSD stablecoin, enhances margin resilience and positions the company to thrive in a lower-rate environment while capturing recurring fee-based income from its expanding ecosystem.
- Explosive member and product growth underscores SoFi’s flywheel momentum, adding millions of users to reach 12.6 million members and 18.6 million products by Q3 2025—up 35% and 36% year-over-year. This viral adoption among younger demographics drives cross-selling opportunities across banking, investing, and lending, creating a sticky platform that fuels sustainable revenue expansion and deepens lifetime customer value in the competitive fintech space.
- Innovative product launches and crypto reentry unlock new growth avenues for SoFi. The return to cryptocurrency trading, alongside blockchain-enabled remittances and AI-powered tools like Cash Coach, caters to evolving consumer demands for seamless digital finance, reinforcing its narrative as a forward-thinking disruptor poised to monetize emerging trends in stablecoins and alternative investments.
- Strong financial flexibility and profitability trajectory bolster SoFi’s long-term resilience. Recent capital raises provide ample liquidity to support scaling without dilution pressures, while consistent profitability improvements and raised guidance reflect operational leverage, painting a picture of a maturing business capable of navigating economic cycles and delivering compounding earnings growth.
- Analyst Ratings:
My Action Plan (46% Return Potential)
- I am bullish on SOFI above $23.50-$24.00. My upside target is $40.00-$41.00.
Market-Moving Catalysts for the Week Ahead
Dow Theory Confirms Breakout
The new all-time high registered in the Dow last week was very bullish. The S&P 500 achieved it too, although the Nasdaq is still behind. But it was an even bigger win for the Dow theorists out there.
Both the Dow Jones Industrial Average and the Dow Jones Transportation Average simultaneously hit new record highs, fulfilling the theory’s key requirement for mutual confirmation of a primary bull market trend.
This marked a significant bullish signal—the first such dual confirmation in over a year—reinforcing the ongoing uptrend with accompanying volume support and broad economic participation. Forward market returns a year later have historically been very strong. This doesn’t mean there won’t be road bumps along the way, but if anything, it tells us to buy the dips.
The “Janus Portal”
The first five trading days of January have historically served as a notable early indicator for the S&P 500’s full-year performance. It’s often referred to as the “First Five Days” rule, but I personally like to call it the “Janus Portal.”
According to historical data from 1950 to 2025 sourced from Fundstrat and Bloomberg, when these days deliver a gain of more than 1%, the index has posted positive annual returns in 87% of 31 instances, and a win ratio highlighted at +84% relative to baseline. The median full-year return of 19% and has average monthly gains of 1.4%.
In contrast, when the first five days fall by more than 1%, the win ratio drops to 57% across 21 cases, with a lower median return of 3%. Overall, across all 76 years, the indicator shows a baseline 74% win ratio, underscoring how a strong January start has historically correlated with significantly higher odds of a bullish year.
Sector & Industry Strength
The sector performance rankings over the past week haven’t exactly rocked the boat, but it continues to favor the bullish outlook. Perhaps the best news is how consumer discretionary (XLY) overtook consumer staples (XLP) in the past week, which is a risk-on signal.
Healthcare (XLV) is still the top-performer since the start of the fourth quarter, but basic materials (XLB) are trying to close the gap even more. This could also be construed as a risk-on signal.
The snooze fest in the tech sector (XLK) continues, however. If this giant reawakens, look for the indices to go ballistic to the upside. Financials (XLF) and industrials (XLI) showing strength is also a very good sign.
1 week3 Weeks13 Weeks26 WeeksConsumer DiscretionaryBasic MaterialsHealthcareHealthcare
Editor’s Note: Consumer discretionary steps up and saves the day for the bulls.
Own the Production or the Inputs? (Sector ETF: XLI/XLB)
There’s been some wild speculation in the commodity space, largely centered around metals and geopolitical events. The energy sector is still not worth our time, but the industrials (XLI) and basic materials (XLB) sectors are another story.
When it comes to making a decision between owning the production infrastructure or owning the materials that go into production, this ratio chart here is telling me to go with industrials (XLI). The ratio is in a clear uptrend as seen by the higher-highs and higher-lows.
Plus, the ratio is rising within the ascending channel. As long as it keeps rising within this formation, industrials are poised to continue their outperformance against materials. For a specific theme within the industrials space, I’d look for anything tech-related.
A Crypto Reset for 2026? (Sector ETF: ETH/BTC)
2025 was a rough year for cryptocurrencies, but if history offers any sort of guide, this could be another spectacular year for gains. Naturally, the question that follows is whether to own Bitcoin or an altcoin in such an environment.
I’m looking at the ratio between Ethereum (ETH) and Bitcoin (BTC) here. What’s most interesting about 2025 is the fact that Ethereum outperformed Bitcoin by a fairly significant margin. This is typically something seen in bull markets, not bear markets.
While crypto remains in a correction, the behavior of this ratio between Ethereum and Bitcoin is very encouraging. It’s starting to form a bull trend, and I’m expecting a breakout from the rounding bottom formation this year. This all points to owning Ethereum over Bitcoin.
A Liquidity Tsunami (Sector ETF: LQD/IEI)
The big question for 2026 is how many times will the Fed cut rates. At the end of the day, the Fed has already started to increase their balance sheet, which signals that stronger liquidity conditions are on the way.
But at the end of the day, I care more about how the bond market reacts to everything versus what central bankers do. It’s why I watch the ratio between investment grade corporate debt (LQD) and 3-7 Year Treasuries (IEI) so closely.
As long as this ratio isn’t breaking down, credit markets are stable. You’re just not going to see a big downward flush in stocks if liquidity conditions are improving. I’m watching this huge rounding bottom base very carefully, because if the ratio breaks above there, we could very well enter a mania in stocks.
Cryptocurrency
Back to looking at Bitcoin again this week. Prices have remained range bound over the past couple months, and in essence, have continued to consolidate their losses. However, there have been some notable technical developments over the past week.
Specifically, I’m referencing how prices exceeded the high of December 10. This comes after prices forming a higher-low on December 18. If we can form another higher-low on this pullback, it would set the stage for a new bull trend starting.
But as always, there is a catch. Prices could be consolidating within a symmetrical triangle formation, which is a continuation pattern. The short-term trend is down. If prices break below the lower trendline of the pattern, it would signal a continuation of the correction and prices could drop as low as 74,000-76,000.
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