The Week Ahead 1/19/26
Hello All,
I hope you’re all enjoying the long weekend and getting some time away from the screens & wishing you all a successful ‘26 ahead.
Looking back at this past week, headlines & economic data are back to flying around from U.S.–Iran tensions to renewed noise around Fed Chair Powell but despite it all, Small-caps are still leading the way, remaining as the best-performing index YTD & also ended up outperforming on the week, having closed higher by just over 200bps.
Meanwhile, the remainder of the major indices closed within the red with the Q’s being the worst performing of the group, having closed lower by just under 100bps, which was largely driven by the continued underperformance within the Mag-7.
- Economic Data for the Coming Week:
In regard to economic data into the upcoming week, after coming off a ‘hot’ past couple of weeks with data back into full swing, this upcoming week has a fairly light agenda with some scattered datapoints throughout the week, but most importantly, we have PCE #’s on Thursday which is the Fed’s preferred gauge for inflation.
- STD Channels on Indices for Perspective: Weekly TF
- SPY
- QQQ
- IWM
- DJIA
Since starting this Substack back in June of ‘23, between individual names / tactical trades / baskets, we have netted a 188.42% return whilst in the same period, the Q’s have returned 76.25% / Spooz has returned 65.53% / Dow has returned 52.64% & Small-caps have returned 51.69%, so nice outperformance against all the indices whilst having a 81.4% win rate, averaging a 26.99% return on realized gains / winners & a 15.12% loss on realized losses / losers.
Looking forward to the future & continued success as we kick off ‘26.
And for anyone who wants to follow an actively managed portfolio in real time:
I’ve joined Plutus as the cleanest, day-to-day way to track an actively managed portfolio in real time. It’s a live dashboard that’s broader, more diversified, actively managed by me, & updated continuously.
The Eliant Flagship is published on RunPlutus.
Once your Plutus account is approved, you’ll have the option to allocate right away. If you do, it’s straightforward: create an account, link your brokerage, & select the Eliant Flagship (or any of the baskets I’ve built). Your money stays in your account, and trades, position changes, and rebalances are replicated automatically so there’s nothing manual to manage.
The first three months are free, and after that it transitions to an AUM-based fee (final pricing still being finalized). The idea is to make it easier to access an actively managed portfolio run by me without the overhead of traditional fund structures or high minimums, whilst you keep full custody of your assets & I stay focused on research, positioning, and portfolio construction.
And just to be clear, NOTHING is changing with Substack. It’ll stay exactly what it’s always been since we originally launched in the Summer of ‘23: where I share the thinking, research, & select trades behind my personal PA, along with ongoing commentary across all markets.
We recently published our ‘2026 Outlook’ which has a plethora of coverage on a wide range of topics / themes as 2026 kicks off after coming off a strong ‘25 & for those whom would like to read the report, I included it just below:
Earlier in 2024, we launched a series titled Educational Pieces, covering a wide range of topics, many of which were suggested directly by you all (4-Part Series).
For those who may have missed the first installment, it covered topics including:
General background / knowledge on all option strategies
In-depth talk on risk / reversals & how to go about expressing / utilizing them
Options Structuring
When to used naked calls / puts vs. spreads
Choosing expiration dates
Identifying key pivots / supports / resistance zones
General briefing on stock gaps
What to look for in regards to fundamentals
Implementing fundamental / macro / technicals into a trade
Hedging
Creating risk/reward setups
Taking profits / managing losses
Overall Process
Book recommendations
A link to the original Educational Piece can be found here .
Given the positive feedback and how useful many of you found the first installment, we followed up with Educational Piece: Part Deux earlier in 2025 & for those who may have missed, a link to the piece can be found here & we then went on to release Educational Piece: Part Trois which can be found here.
And finally, the most recent installment, Educational Piece: Part Quatre, can be found here.
‘Risk management is the silent prerequisite for compounding & true wealth is built not by chasing the highest returns but by ensuring the survival necessary to realize them.’
Before we jump into the week ahead, looking back at this past week, despite the headline volatility driven by the U.S.-Iran tensions along with the criminal charge threats against Fed Chair Powell, the week generally ended up closing out on the quieter side with majority of the indices having closed just slightly lower, besides Small-caps, which closed higher by 200bps on the week.
Nevertheless, the general theme on the week was mostly characterized by a larger ‘factor rotation’ which is made clear with the chart below given the spread established between Value & Growth:
Another chart highlighting this underlying dynamic is the Growth/Value chart below which is nearly on the verge of posting a 3+ year breakout:
And the amplification in terms of the ‘factor rotation’ was generally very noticeable all week given the strength within Equal-Weight / Small-caps / Cyclicals over Tech.
RSP for example is sitting at new highs:
And the same can be said for Small-caps:
And although individuals are just now coming to the realization of the recent Small-cap & Cyclical outperformance, Small-caps have been outperforming Tech since August of ‘25 with IWM/QQQ having risen 11.5% within the period:
General point being, despite Spooz & the Q’s having largely remained rangebound for the past several months, it’s instead just allowed capital to flow elsewhere (S&P 493) which has driven quite the uplift in breadth & upside participation which is made clear as shown below given the new high within the ADV-DECL Line this past week despite Spooz being around 100bps off ATHs:
And speaking of large factor rotations, in regard to sector performance, what’s the top performing group YTD? You guessed it, Cyclicals:
- Industrials (Cyclical)
- Materials (Cyclical)
- Energy (Cyclical)
- Staples (Non-cyclical / Defensive)
- Real Estate (Cyclical)
- Transports (Cyclical)
5/6 top performing sectors YTD are all… cyclical.
With that being said, despite the lackluster price action within the indices more recently besides Small-caps, overall breadth has continued to remain strong which is made clear given the % of Stocks above the 20D is continuing to slowly encroach overbought territory in the shorter-term, currently sitting at 66%:
And the same can be said on a more broader timeframe as the % of stocks above the 50d has snapped back higher & now sits at 68% (Peak in last 5-years was December ‘23 near 85% following Powell’s initial signal that the Fed was ready to move toward a rate-cut cycle):
And for further evidence that conditions have normalized & are slowly starting to encroach ‘overbought’ territory, the Fear-Greed index finally printed into ‘Greed’ territory this past week, which prior to the post December-FOMC rally, ‘Greed’ territory hasn’t been seen since September ‘25 & we were more so stuck within the ‘Extreme Fear’ / ‘Fear’ territory for quite some time (3-months) given poor breadth along with the lack of upside participation.
Moving away from the indices and turning to economic data, this past week was a relatively quieter one comparatively to the week prior but we did have CPI #’s reported Tuesday which came in milder than expected thus reinforcing the ongoing & expected disinflation trend into Q1.
Headline came inline at 2.7%, BUT Core surprised to the downside & came in at 2.6% vs. 2.7% estimated.
Another interesting datapoint worth highlighting was last week’s jobless claims print which was a clear positive. Initial claims fell again and came in around 198K, pushing back toward cycle lows and reinforcing that the labor market is still tight with layoffs remaining contained.
In other words, the slowdown narrative continues to fade as the data keeps signaling resilience rather than stress (Overheating risks / Slowdown Risks).
General summary here being: The ‘Goldilocks’ regime lives on.
With that being said, despite the tamer than expected inflation data, rate-cut expectations still remained largely unchanged & as of now, the first cut for ‘26 is still expected to take place in June & 2-cuts for the remainder of ‘26 remain as the base case:
And finally, before we jump into the remainder of the week ahead, following Trump’s statement on Friday suggesting Hassett should stay in his current role, Warsh’s odds surged for the next Fed Chair & he now remains as the current favorite with odds sitting just under 60%.
Trump has stated he plans to announce the selection of the next Fed Chair within the next few weeks which will be an important development to keep track of which we’ll talk about more later.
