Performance - 2026
1st Quarter 2026
The first quarter of 2026 was a very tricky period to participate in the stock market as the market experienced more choppy action that started in October 2025. The S&P 500 put in a correction low in late November 2025, but after a strong week one of the rally the rest of December 2025 was lackluster to the upside. Then starting in January 2026 the market continued to the upside for the first month of the year, but the major indices only slightly made a new high before rolling over into another correction.
The S&P 500 then spent the next two months during February and March 2026 in correction and the S&P 500 put in a low at the end of March with nearly a -10% move lower. The best stocks had to fight their way through all of this heavy market during the first quarter of 2026, and some stocks were able to perform well, but they were much fewer than what would happen in a strong market. The headwind of the overall market simply has made the stock market much harder to trade to the long side than when individual stocks have the S&P 500 at their back powering them higher.
Leading sectors during this period included red hot fiber optics stocks, semiconductors, computer hardware, artificial intelligence, space, and biotech stocks. GEV, SNDK, and FSLY were some of the best entries below as each stock emerged from a base with minimal or no overhead resistance and had strong sector strength behind them. Both SNDK and FSLY also had monster volume on their breakouts which is a key edge to finding big winning stocks. Both SNDK and FSLY ended up being two of the best stocks in the entire stock market to trade during the first quarter of 2026, and Stage Analysis gave great entries into each stock!
The Timing Model in this newsletter went negative right at the end of January which was the start of the correction that bottomed in late March. Failed breakouts and high volume selling in late January was the key tell that the market was starting to falter and the high volume selling in the major indices was also apparent on the weekly charts. At the end of March a weak volume bounce started which is more prone to failure, and there's potential the second quarter of 2026 could be another hostile period until institutions start coming back into this market with more volume.
The bottom line is after a very strong market in 2025 after the first quarter 2025 bear market, 2026 has proven to be a corrective and hostile market so far after the huge rally. Patience continues to be needed to let the hostile market play out and a better trading opportunity to the long side will likely present itself later in 2026.
The following stocks are reviewed in the video below:
GEV - Issue #158
PL, AAOI - Issue #159
LUNR, DAWN - Issue #160
ADEA - Issue #161
SNDK, EQNR - Issue #162
UCTT - Issue #163
GEV, WTI - Issue #164
VIAV, GLW, AAOI - Issue #166
FSLY - Issue #168
ZSL - Issue #170
FSLY - Issue #171
FSLY, LWLG - Issue #172
(Note: Stocks in bold were on the Best Stage 2 Breakouts, Stage 2 Breakout Pullbacks, or Long Term Trades list for that issue of the newsletter)
2nd Quarter 2026
The second quarter of 2026 started off with the stock market coming out of the biggest correction of 2026. By the end of March 2026 the S&P declined for 5 straight weeks and put in a -9.8% correction that started at the end of January 2026. This two month correction brought the S&P 500 below the 30-week EMA for the first time since the 2025 bear market.
Volume was lackluster in the major indices when they started emerging out of the late March 2026 correction lows. But a new leading sector started making new highs with no resistance immediately after the correction was over: semiconductors and computer hardware stocks. Semiconductors had been outperforming the S&P 500 ever since the April 2025 bear market lows where the SMH ETF erupted higher on monster volume when that bear market was over. When the late March 2026 correction was over the SMH ETF broke above all of its resistance in the first week of April and that set off a big run higher in semiconductor and computer hardware stocks for the rest of the quarter.
Two of the biggest winners of the cycle were featured multiple times in this newsletter, including top stock of 2026 SNDK (Issues #172, #173, #176, #177, #181, and #182) and MU (Issue #172, #176, #181, and #182). Hot sectors tend to produce consecutive weeks of Stage 2 breakouts and from mid-March all the way through May there were good buy points in semiconductor stocks breaking out of bases on big volume, and clearing their overhead resistance. MRVL, ARM, and TSEM were three other semiconductor stocks among more that were featured multiple times on breakout and pullback buys.
One of the most difficult aspects of the quarter was the fact that most other sectors failed to join the strong move in semiconductor and computer hardware stocks higher, so diversifying across sectors actually worked against traders attempting to do that. The space stocks did have a big move higher over a short period of time leading into the SPCX IPO, but then they had a big correction afterward. The best period to trade was after the April lows through late May, and then a correction in June brought most of the market down with it quickly, including sharp moves lower in the leading semiconductor and computer hardware stocks.
Then coming out of the June 2026 correction lows biotech became a leading sector and two new breakouts working well in that sector were GH and PSNL. The semiconductor stocks which had some monster gainers during the April - June timeframe continued to selloff on heavy volume by the end of June. So the second quarter of 2026 was the biggest opportunity on the long side to make big profits so far in 2026, and the key to doing that was trading leading stocks in semiconductors and computer hardware. The principles of Stage Analysis helped identify the big opportunity in that sector with multiple stocks showing sector strength, and breaking out to new highs with no resistance on strong volume.
The following stocks are reviewed in the video below:
SNDK, MU, WDC, NBIS - Issue #172
TSEM, SNDK - Issue #173
ARM, NAVN - Issue #174
AEHR, AAOI, MRVL - Issue #175
AXTI, MU, SNDK - Issue #176
SNDK, ARM, MRVL, CRDO, BE - Issue #177
CBRL, CRDO - Issue #178
RKLB, LUNR, TSEM - Issue #179
IONQ - Issue #180
MU, SNDK - Issue #181
MU, SNDK, TENB, PSNL, GH, SNOW - Issue #182
(Note: Stocks in bold were on the Best Stage 2 Breakouts, Stage 2 Breakout Pullbacks, or Long Term Trades list for that issue of the newsletter)
3rd Quarter 2026
The third quarter of 2026 had a choppy overall market that prevented leading sectors and stocks from forming and making meaningful progress higher outside of a few exceptions. The major indices had multiple corrections during this period which created a headwind for the rest of the market. The Nasdaq 100 corrected over -11% in July on the back of a major correction in semiconductor stocks, and then after bouncing went on to move almost -5% lower into August. The Russell 2000 which had held up the best through July had its second biggest correction of the year starting in August and continuing until the end of September. And the equal weight S&P 500 had a similar correction to the Russell 2000 moving back to the 30-week EMA as September concluded and having its second correction of 2026.
A key point with trading discussed in the Getting Started Guide was on display this past quarter. Not only does a poor overall market impact the ability to get a winning trade, but the number of big winners and size of their outperformance also declines. What this does is create an environment where its much more difficult to make significant gains in a trading account. And it greatly increases odds that the account will suffer a drawdown because its much harder to find the big winning trades that overwhelm the small losers that occur when trading. So overall during these types of environments trading less and holding heavier cash positions than normal is the best way to minimize the drawdowns in these situations.
In terms of leading sectors during the July - September 2026 timeframe, ARKG which is a genomics biotech ETF broke out into Stage 2 right around when the S&P 500 had its correction in June 2026. Then it proceeded to grind higher throughout the third quarter, including two pullbacks to the 10-week EMA that coincided with weakness in the overall market. This ETF has top positions in a number of top stocks during the 3rd quarter of 2026 including TEM and TWST which were featured in this newsletter.
Along with TEM and TWST the monster breakout of this period and of 2026 was the Stage 2 breakout on huge volume in MRNA in August. The stock spent almost a month consolidating sideways after the huge breakout and then had a big follow through move higher into the end of September. The best trade in this newsletter during the 3rd quarter was the Stage 2 breakout pullback buy in MRNA that was highlighted in Issues #196 - #199 that captured that big move higher once the stock followed through.
Cybersecurity was another leading sector that moved higher throughout the 3rd quarter but also was impacted by a weak overall market. The CIBR ETF continued in a choppy uptrend from July through September that spent more time moving sideways than higher during the uptrend. OKTA was a top leader for the cybersecurity stocks after it broke out into Stage 2 in early June on heavy volume.
Overall the 3rd quarter of 2026 was similar to the 1st quarter of 2026, not much working on the long side with a weak overall market. And the short side wasn't favorable either because the trend of the overall market was sideways. Those who traded less and were more defensive benefitted the most during this period as there were very few big winners like the continuation move higher in MRNA.
The following stocks are reviewed in the video below:
GH - Issue #182
TEM, OKTA - Issue #183
MRNA - Issue #186
TEM - Issue #187
AMPL - Issue #188
TWST - Issue #189
TWST - Issue #191
RNG - Issue #192
MRNA, TEM - Issue #196
MRNA - Issue #197
MRNA - Issue #198
MRNA - Issue #199
(Note: Stocks in bold were on the Best Stage 2 Breakouts, Stage 2 Breakout Pullbacks, or Long Term Trades list for that issue of the newsletter)
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