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)
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