After a rocky start from the tariff war where the markets saw drawdowns of over 20%, they came roaring back to finish positive with tech leading the way. In 2025 QQQ gained 20.16% while SPY gained 16.35% and IWM followed with an 11.4% gain. Metals were the big winners with a massive rally for Silver into the end of year which earned it the top spot with a near 145% gain in 2025. Gold was consistent all year and returned over 64%. Meanwhile Bitcoin was negative on the year, losing about 6%.
For the markets, there was some selling into the end of year that finished them off with a weak note and there was some technical damage so I'm being cautious going into 2026. Looking at monthly time frames, and starting with IWM, it still is in a monthly uptrend and there is no real risk of gapping below that support to start the month. IWM finished at $246.16 and monthly uptrend support is at about $240.25, so it's still about 2.5% away. But, with the technical damage that's been done on daily and weekly time frames combined with the weak finish for the month in December, I do believe it's likely that we'll continue lower and we'll get a test of this $240.25 area.
QQQ had a failed breakout through its monthly downtrend resistance last month. Now it wasn't a really weak finish for the month, but it still starts a new downtrend and now it does set up for a short trade if we get a retest of that failed breakout resistance which is just below $619. So I would be looking at a short entry above $618 for this setup. The new downtrend resistance from the failed breakout is at about $622.50 and I would want to keep a stop at $622.75 for it.
Lastly, SPY looks a bit different as it did close back above its prior monthly uptrend support which starts a new monthly uptrend for it. But it wasn't a strong enough finish in December and we'll likely see it open below (outside) of this new support tomorrow. That support is at about $692.50 and with SPY closing December out at $681.92, it's extremely unlikely that it will gap up that much (1.5%) tomorrow to open above it. So assuming we do not see this big gap up tomorrow, then the $692.50 area will be resistance if SPY does make a rally attempt for it. It is still possible that it breaks through it in January, and if that happens we have to wait to see if it closes above it or not to put in a potential failed breakdown again. If it does break through $692.50 then I would be looking at the $700-$700.50 level as the next monthly resistance from its last uptrend (yellow channel).
