Trading The Close Market Recap - 01/07/2026: Markets Pause as Nasdaq Tests Resistance, Bitcoin Coils for $100K

This recap is based on the January 7, 2026 episode of Trading The Close with Pro Trader Drew Dosek of Verified Investing.

After a multi-day push, the markets took a collective breath today, with major indices like the Nasdaq 100 and the Russell 2000 posting slight declines. This pause, however, is far from bearish; it represents a critical phase of consolidation and testing at key technical levels. In this afternoon's Trading The Close, Pro Trader Drew Dosek of Verified Investing provided a masterclass in technical analysis, revealing how simple trendlines, long-term patterns, and price consolidation are creating a clear roadmap for what may come next. From Bitcoin coiling for a potential six-figure move to individual stocks testing trendlines that are years, and even decades, in the making, the charts are telling a compelling story for those willing to listen.

The Nasdaq's Battle at Resistance

The technology-heavy Nasdaq 100 (QQQ) provided a perfect example of price action respecting a predefined level. After a strong run-up, the index met resistance precisely at a level identified in yesterday's analysis. As Drew pointed out, the level of $624.97, which was tagged back on December 26th, once again acted as a ceiling. The price briefly pierced this level before sellers stepped in, pushing it to close below the line.

This price action highlights a fundamental concept in technical analysis: the battle between buyers and sellers at significant levels. However, it also introduces a more nuanced principle that savvy traders understand well. As Drew explained, “the more and more we hit that resistance level, the weaker it becomes.” Think of a resistance level as a wall. Each time price hits it, a few more bricks are knocked out as the supply of sellers at that price is absorbed by determined buyers. While the first few attempts may result in sharp rejections, subsequent tests often lead to a breakout. For now, $624.97 remains the line in the sand. To the downside, the parallel channel support sits around $617.76, a break of which could open the door to a pullback toward the $600 to $605 zone.

Similarly, the semiconductor ETF (SMH) is undergoing a healthy consolidation after a powerful four-day surge to new all-time highs. A pause is not only logical but necessary for the market to digest such a significant move. The first key support for the SMH lies at the 50% area of its parallel channel, around $380.39. This period of consolidation is building energy for the next potential leg up, with long-term resistance targets above the $420 mark.

Bitcoin: A Study in Consolidation and Potential Energy

Perhaps one of the most fascinating charts discussed today was Bitcoin. For months, its price action has been defined by a key technical feature: the 50% area of its long-term parallel channel. This median line has proven to be incredibly "sticky," acting as a gravitational center for price. Drew highlighted the historical significance of this zone: “We've been talking about how this 50% area is generally very sticky, where we have around 90 days of consolidation around it, about 100 days of consolidation, about 60 days of consolidation… and then we're sitting right here around 60 days on it, too.”

This prolonged period of sideways movement is not random noise; it's the market building a cause for a future effect. Currently, this consolidation is forming the "handle" of a potential cup and handle pattern. This classic bullish formation, if it matures and plays out, carries a significant measured move target. A breakout would first have to contend with the massive psychological resistance at the $100,000 level. Should it clear that hurdle, the technical target points toward the $102,000 to $105,000 zone. While the pattern is still immature, the longer Bitcoin consolidates along this 50% median line, the more powerful the eventual breakout could be. This is a prime example of how patience and pattern recognition can identify explosive opportunities before they happen.

Precious Metals: Trapped Within a Single Candle

The precious metals complex, specifically gold and silver, is telling a story of bearish consolidation. Both metals gave back some of yesterday's gains, but the more critical observation is where this price action is occurring. For weeks, the daily price closes for both gold and silver have been contained entirely within the range of a single, large red candle from a few weeks prior.

As Drew explained, “Until that point occurs, this is considered bearish consolidation, folks.” This phenomenon, where price struggles to overcome the high of a major down day, indicates that sellers remain in control. The market is attempting to retrace the drop, but so far, it has failed to gather enough momentum. The only way for bulls to "flip the script" and shift the probabilities back in their favor is to achieve a daily close above the high of that defining red candle, which for gold is $4,550. Until then, the path of least resistance, from a probabilistic standpoint, remains to the downside.

Silver exhibits a very similar pattern, though it is showing slightly more relative strength than gold. The long-term picture for silver remains intriguing. A weekly cup and handle pattern identified months ago carries a massive upside target of $89.38. The fact that this level was not tagged on the previous move up means the potential for another attempt still exists. A breakout above its own large red candle could be the catalyst to send silver on a run toward that major long-term objective, where significant selling pressure would then be expected.

The Power and Simplicity of the Trendline

Today's analysis of several individual stocks served as a powerful reminder that sometimes the most effective technical analysis is the simplest. The humble trendline, when drawn correctly, can provide an incredibly accurate roadmap for support and resistance.

A textbook example was seen in Microchip Technology (MCHP). The chart demonstrated a pattern Drew has often called one of his most profitable setups: “Price action likes to break out, retest the trend line, and then bounce and go higher, and that's exactly what happened on MCHP.” After breaking out from a declining trendline, the stock consolidated sideways before coming back down to perfectly retest that same trendline, which had now flipped from resistance to support. The subsequent bounce was powerful, running directly into the 61.8% Fibonacci retracement level at $75.18. This illustrates the market's memory and the importance of patience in waiting for these high-probability retest entries.

Intel (INTC) provided another stunning example. A single trendline, drawn from a pivot high in August 2024 and extended forward, has acted as perfect resistance over a year later. Multiple rally attempts, including today's powerful surge, have been rejected at or near this line. It shows that significant technical levels can remain valid for incredibly long periods, guiding price action with uncanny precision.

On the flip side, Skyworks (SWKS) demonstrated the potential danger of breaking a major trendline. The stock plunged below an inclining trendline whose origin dates back to December of 2008. A break of a 15+ year trendline is a significant technical event. While the stock is finding some near-term support, the principle of the retest now works in reverse. A potential swing trade opportunity could arise if the stock bounces back up to retest the broken trendline from underneath, where it would now be expected to act as major resistance.

Unlocking Potential: Consolidation and Breakouts

Beyond trendlines, the theme of consolidation as a precursor to a major move was evident across the board. Meta Platforms (META) has been in a wide, sideways range since its sharp V-shaped recovery. To the untrained eye, the chart may look messy and directionless. However, as Drew noted, “all of this, if you clean up the noise, is just consolidation. That's winding up for a bigger move on the charts.” The price action is bookended by support at $637.63 and resistance near $710. Interestingly, that resistance area coincides with a "fake print" on the chart, which can often act as a magnet for price. A breakout from this consolidation range will likely lead to a sustained, directional move.

United Microelectronics (UMC) offers another compelling case of pent-up energy. The stock has been held down by a declining trendline for over two years. Today, it surged nearly 10% on strong sales guidance, stopping directly at this long-term resistance. Given how many times this trendline has been tested, the probability of a breakout is increasing. A decisive move above this line could release a significant amount of buying pressure that has been building for years, potentially sending the stock on a major run toward the $10.00 level.

Conclusion: Reading the Market's Roadmap

Today’s market action was a story of consolidation, testing, and pattern development. Across indices, cryptocurrencies, commodities, and individual stocks, key technical levels are being challenged. The Nasdaq is knocking on the door of resistance, Bitcoin is coiling in a potentially explosive pattern, and precious metals are trapped in a bearish holding pattern.

The key takeaway for traders and investors is the importance of understanding these technical structures. A simple trendline, a period of consolidation, or a classic chart pattern can provide invaluable clues about future price direction. By identifying these levels in advance, exercising patience, and understanding the probabilities involved, one can navigate the market with a clear and logical framework. The setups are forming, the lines are drawn, and the coming days will reveal whether these consolidations resolve in powerful breakouts or decisive breakdowns.

To see these levels mapped out live each afternoon and learn these powerful technical analysis techniques, join Drew Dosek in Trading The Close, exclusively at Verified Investing.