Finding Alpha in a Choppy Market
Complete February Roadmap and Technical Analysis eBooks - Levels for Indices, Futures, Megacaps, ETFs, Metals, and Crypto.
Friday’s session featured dramatic volatility in commodities and divergent reactions to corporate earnings. Precious metals suffered a sharp correction following their record run, with GLD plunging -10% and SLV collapsing -29%. This historic selloff hammered the materials sector (XLB), which fell -1.5% to finish as the day’s worst performer sector following the -2.04% selloff in technology (XLK). Corporate earnings delivered mixed results. Verizon surged nearly 12% and Deckers Outdoor jumped over 19% on strong quarterly reports, while chipmaker KLA Corporation slumped 15% despite beating estimates. The heavyweights MSFT and AAPL failed to sustain momentum. TSLA bucked the trend, rallying over 3% on reports of a potential merger with SpaceX or xAI.
Macroeconomic developments added another layer to market dynamics. President Trump’s nomination of former Fed Governor Kevin Warsh as the next Federal Reserve Chair captured headlines, though the move did not immediately shift monetary policy expectations. The announcement arrives as markets navigate the heart of earnings season and ongoing valuation debates. Bitcoin extended its decline during the week, retreating -5% so far to two-month lows near $83,000 as leveraged positions unwound amid the broader risk-off tone.
Our High-Probability Setups performed exceptionally well this week. The bullish expectation for Meta (META), posted one week ago, was proven correct. The stock not only reached the first target of $683.5 (+3.8%) but surged past the extended target of $708.2 (+7.5%). Meta rallied +8.7% for the week, validating the thesis that strong fundamentals and extreme oversold conditions would spark a significant reversal. Of course, we will study the gap.
Microsoft (MSFT) also exceeded its bullish target of 478 (+2.7%) comfortably before earnings. As noted, surpassing a target before a binary event like earnings is a signal to lock profits or adjust stop losses. Amazon (AMZN) followed suit, validating our target of 244 for a 2.1% gain.
These results are significant because the broader market was flat during the week. The S&P 500 closed up just 0.34% and the Nasdaq 100 up 0.21%. Generating alpha with Meta (+7.6%), MSFT (+2.7%), and AMZN (+2.1%) in a choppy environment proves the power of stock selection paired with precise technical analysis and Support and Resistance Levels.
We also capitalized on bearish setups, I anticipated since December 2025 that the times ahead will demand to monetize in both ways, since 2026 is likely to bring turbulence in price action:
Eli Lilly (LLY): Reached our downside target of $1,021.5 (-4%) on Wednesday. And as anticipated in the Midweek Update (Wednesday after market closed), the stock was likely to bounce, and the price action confirmed my technical interpretation on Thursday and Friday.
Walmart (WMT): Hit our $116 target (-1.4%) on Tuesday. We are now seeing a rotation from Technology into Retail/Staples, changing Walmart’s momentum.
IWM (Russell 2000): Successfully reached the bearish target of 260 (-1.8%) on Wednesday, confirming the downtrend.
Regarding risk management, Palantir (PLTR) was a prime example of the protection our levels provide. While the stock plummeted 13.5%, our bullish invalidation level at $167.6 limited the loss to just 1.2% from the entry point. Conversely, J.P. Morgan (JPM) invalidated its bearish setup by breaching the Central Weekly Level of $301.7, signaling an immediate exit after a 1.4% move against shorts.
The Week Ahead
We are entering a historically weak seasonal period within the presidential cycle. Staying nimble is essential. The analysis below includes the Central Weekly and Monthly Levels for the following securities. These levels will help you identify whether stocks are in bullish or bearish momentum for the month ahead. I changed the format to highlight better bullish and bearish conditions.
We Cover:
Indices: SPX, NDX, DJI, IWM, ES=F, NQ=F
Majors: AAPL, MSFT, GOOG, AMZN, NVDA, META, TSLA, BRK.B, LLY, WMT, AVGO, COST, JPM, PLTR, NFLX
ETFs & Commodities: SPY, QQQ, SMH, TLT, GLD, SLV, DIA, SH, PSQ
Crypto: Bitcoin, ETH, IBIT, MSTR
Leveraged: TQQQ, SQQQ, UDOW, SDOW, UPRO, SPXS, URTY, SRTY
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Below, premium subscribers will find the Weekly Levels for the week ahead, the Monthly Levels for February, and my two eBooks on Essential and Advanced Technical Analysis.
WEEKLY LEVELS
I have improved the format, so you can find easier the bullish and the bearish conditions: