Stock Market & Crypto Analysis for Week Ending 1/16/26

Market Analysis - January 16th, 2026 - Brian Shannon (altrends.net)

Key Concepts:

• Anchored Volume Weighted Average Price (AVWAP): A trading benchmark that indicates the average price a security has traded at throughout a specific period, weighted by volume.
• Moving Averages (MA): Indicators that show the average price of a security over a specified period (5-day, 20-day, 50-day, 200-day). Used to identify trends and potential support/resistance levels.
• Anchors: Significant price levels (highs or lows) used as reference points for measuring potential price movements. Anchors from all-time highs, election dates, and previous lows are frequently referenced.
• Measured Move Objective: A price target calculated by projecting the distance of a prior price move from a breakout point.
• Stage 4 Decline: A bearish pattern characterized by consistently lower highs and lower lows, indicating a strong downtrend.
• Cup and Handle: A bullish continuation pattern in technical analysis.
• Benefit of the Doubt to the Buyers/Sellers: A trading philosophy of assuming the prevailing trend will continue until proven otherwise.

I. Cryptocurrency – Bitcoin (BTC)

Brian Shannon notes Bitcoin is exhibiting bullish behavior, currently encountering expected supply resistance around key anchors. He previously purchased Bitcoin in a lower range, sold portions as it rallied, and re-entered the market. A critical near-term low is identified; failure to hold this level could lead to a retest of the year-to-date anchor. Key anchors influencing Bitcoin’s price action include the all-time high, the election anchor, and last year’s anchor. He emphasizes that Bitcoin is “acting bullish” and simply “finding some supply where it’s supposed to.”

II. Broad Market Indices – S&P 500 & NASDAQ

• S&P 500: The S&P 500 has been choppy, briefly dipping below the year-to-date AVWAP before recovering. Maintaining a position above this AVWAP is crucial early next week. Failure to do so could lead to a test of the 20-day moving average (red line) and potentially the 50-day moving average and the November low anchor. Shannon describes the current situation as “flashing a yellow light,” highlighting a pattern of a high, lower high, and low.
• NASDAQ: The NASDAQ experienced a potentially misleading “bad print” on a five-minute chart (actually occurring on Thursday, not Friday). Despite the choppy range, the index is building energy with rising 20, 50, and 200-day moving averages. However, its distance from the 200-day moving average suggests a potential for a larger correction if it breaks down.

III. Sector Performance – Russell 2000 & Semiconductors

• Russell 2000: Demonstrated strong momentum, bouncing from its 50-day moving average. A measured move objective is projected near 275, calculated by extending the distance between points A, B, and C on the chart. Shannon advises giving “the benefit of the doubt to the buyers” as the index remains above the 5-day moving average and discourages shorting.
• Semiconductors: Similar to the Russell 2000, semiconductors are showing strength with a pattern of higher highs and higher lows. They have broken out of a cup and handle formation and are moving into all-time high territory. Shannon reiterates the importance of favoring the buyers and acknowledges increased volatility is likely.

IV. Sector Analysis – Biotechs, Financials, & Energy

• Biotechs: Currently consolidating and potentially poised for a pullback and time correction. Shannon suggests observing the sector next week without taking a position.
• Financials: In “no man’s land,” trading below a declining 20-day moving average but above a rising 50-day moving average. Stabilization next week could present a buying opportunity.
• Energy: Showing potential for a significant breakout on the weekly timeframe, but has been threatening to break out for the past year and a half. A pullback after a breakout would be desirable to reduce risk. The analysis notes the continued depressed state of oil prices.

V. Individual Stock Analysis – Big Tech & Beyond

• Apple: The August low anchor may provide a support level for a potential bounce.
• Amazon: Pulled back to its 20 and 50-day moving averages, warranting observation.
• Google: Remains the strongest performer among the analyzed stocks.
• Meta: Broke down below a key anchor and exhibits a declining 20 and 50-day moving average. Shannon strongly advises against buying the dip.
• Netflix: In a Stage 4 decline, characterized by lower highs and lower lows. A potential undercut of the recent low could precede a bounce, but buying is not recommended.
• Microsoft: Also exhibiting a poor chart pattern, down to last year’s anchor with no evidence of buyer control.
• Nvidia: Currently in “no man’s land,” but building momentum. Breaking above a key zone is needed for buyers to gain control. A recent shakeout was recovered from, a positive sign.
• Palantir: Struggling, trading below the year-to-date anchor and down year-to-date. A potential move towards the 200-day moving average is anticipated.

VI. Trading Philosophy & Resources

Shannon consistently emphasizes giving “the benefit of the doubt to the buyers” when prices are above rising moving averages. He provides daily market updates for subscribers to Alpha Trends and a Twitter/X subscription for $10/month. He cautions against attempting to “pick a top” prematurely.

Conclusion:

The market presents a mixed picture as of January 16th, 2026. While the S&P 500 and NASDAQ show some weakness, the Russell 2000 and semiconductors demonstrate strong momentum. Sector performance is varied, with energy showing potential and financials remaining uncertain. Individual stock analysis reveals significant divergence, with some tech giants struggling while others maintain strength. Shannon’s analysis stresses the importance of monitoring key levels, respecting prevailing trends, and exercising caution when considering short positions. He advocates for a disciplined approach to trading, emphasizing the value of daily market updates and a focus on technical indicators like moving averages and anchors.