Market Overview

Last week delivered exactly what bulls wanted to see. The consumer discretionary sector drove the Dow Jones Industrial Average and S&P 500 to fresh all-time highs, and we even got a classical Dow Theory confirmation of this bull market (stick with me, we'll get to what that means in a minute). The Dow Jones led the charge higher, finishing up 2.32%, while the S&P 500 climbed 1.57%. The Nasdaq rallied 1.88%. Small caps decided to join the party as well, with the Russell 2000 outperforming its large cap peers.

Beneath the surface, significant rotations are taking place as the tech sector continues struggling to regain its momentum. The big question for this week: can a Supreme Court ruling on tariffs shake markets at all?

Three Stocks Worth Watching

Archer Aviation: Ready for Liftoff

The Setup

Archer Aviation Inc. (ACHR) is a leading developer of electric vertical takeoff and landing (eVTOL) aircraft designed for urban air mobility. Think safe, sustainable, and quiet flying vehicles for future air taxi networks. For investors, it offers exposure to the rapidly growing advanced air mobility and electric aviation sector with a focus on innovation, certification progress, and commercial partnerships.

Let's be clear about the financials: the company had no revenue last quarter and lost $76.3 million. The valuation is sky-high given the revenue situation, with a Book Value of just 2.25. This is very much a bet on the future, not the present.

From a technical perspective, ACHR is looking to break out from a rounding bottom pattern. If it does, that would signal a new bull trend is underway in this stock.

Why This Matters Now

Archer Aviation 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 burgeoning demand for efficient, eco-friendly air taxis in congested cities and creating a foundation for recurring operations in high-growth international corridors.

The company's financial runway is robust. Archer ended 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.

One more thing worth noting: this is a strong candidate for a short squeeze with nearly 14% of floated shares being sold short.

Analyst sentiment is mixed. Goldman Sachs rates it Neutral, Canaccord Genuity has a Buy rating, and JP Morgan sits at Neutral.

The Trade (55% Return Potential)

I'm bullish on ACHR above $7.40-$7.50. My upside target is $13.50-$14.00, representing about 55% potential upside from current entry levels.

Gilead Sciences: Steady Growth with Blockbuster Potential

The Setup

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. For investors, it offers exposure to the biotechnology and pharmaceutical sector with a focus on transformative therapies and a robust pipeline of antiviral and cancer treatments.

The financials here tell a very different story than Archer. The company generated $7.77 billion in revenue during their last quarter and printed $3.1 billion in earnings. This is a real business with real profits.

Valuation is solid. The P/E ratio sits at 18.31, Price-to-Sales is at 5.13, and EV to EBITDA is at 12.02. These are reasonable multiples for a biotech company of this caliber.

From a technical angle, GILD is coiling up tightly within an ascending triangle. This pattern points to a continuation of the underlying uptrend.

Why This Matters Now

Gilead Sciences 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.

The 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.

The 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.

There's also the dividend angle. Gilead offers attractive dividend reliability with a forward yield around 2.6% and 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 sentiment leans positive. Morgan Stanley rates it Overweight, Wells Fargo has an Overweight rating, and Needham calls it a Buy.

The Trade (24% Return Potential)

I'm bullish on GILD above $105.00-$108.00. My upside target is $150.00-$155.00, representing roughly 24% potential upside.

SoFi Technologies: The Fintech Flywheel Accelerates

The Setup

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. It provides 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 generated $949.63 million in revenue and $130.97 million in earnings in their last quarter. The revenue growth story here is impressive.

Valuation is a bit elevated. The P/E ratio sits at 52.29, Price-to-Sales is at 10.64, and Book Value is 6.97. You're paying a premium for growth, which makes sense given the trajectory.

From a charting standpoint, SOFI is approaching the apex of a triangle formation. This signals a resolution is imminent, and since the trend is already up, the bias is to the upside.

Why This Matters Now

SoFi Technologies 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.

The member and product growth is explosive. SoFi added millions of users to reach 12.6 million members and 18.6 million products by Q3 2025, up 35% and 36% year-over-year respectively. 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 improving 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 sentiment is mixed. Truist Securities has a Hold rating, UBS rates it Neutral, and Citigroup calls it a Buy.

The Trade (46% Return Potential)

I'm bullish on SOFI above $23.50-$24.00. My upside target is $40.00-$41.00, representing approximately 46% potential upside.

Market-Moving Catalysts for the Week Ahead

Dow Theory Confirms the 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 lagging 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 is a big deal.

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 bumps along the way, but if anything, it tells us to buy the dips.

The "Janus Portal" Opens Strong

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, with a win ratio highlighted at 84% relative to baseline. The median full-year return is 19% with 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 just 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.

This year, we cleared the 1% threshold comfortably, which bodes well for the year ahead.

Sector Analysis: What's Working and What's Not

The sector performance rankings over the past week haven't exactly rocked the boat, but the trends continue 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 classic risk-on signal.

Healthcare (XLV) remains 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.

Here's how the sectors stack up across different timeframes:

• 1 Week: Consumer Discretionary leads
• 3 Weeks: Basic Materials takes the top spot
• 13 Weeks: Healthcare dominates
• 26 Weeks: Healthcare still in the lead

The key takeaway? Consumer discretionary stepping up saves the day for the bulls.

Own the Production or the Inputs?

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, the ratio chart between these two sectors 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 an 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?

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 for 2026.

A Liquidity Tsunami Building?

The big question for 2026 is how many times the Fed will 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 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 phase in stocks.

The setup is there. The question is whether it materializes into something bigger.

Cryptocurrency Watch: Bitcoin at a Crossroads

Back to looking at Bitcoin again this week. Prices have remained range bound over the past couple of months and have essentially 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 formed 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.

The next week or two will be crucial in determining which way Bitcoin breaks from this consolidation.

Bottom Line

The bull market got its official Dow Theory stamp of approval last week, and the "Janus Portal" opened with a strong signal for the year ahead. Consumer discretionary is showing leadership, industrials are outperforming materials, and liquidity conditions continue to improve.

Yes, there are risks. A Supreme Court ruling on tariffs could shake things up this week. The tech sector needs to wake up from its slumber. And Bitcoin is at a critical technical juncture.

But the weight of the evidence points to continued strength. The playbook is simple: buy the dips, focus on sectors showing relative strength, and keep an eye on those liquidity indicators. If credit markets stay stable and that corporate debt ratio breaks out, we could see a significant acceleration higher.

The bulls are in control to start 2026. Don't overthink it.