Trading The Close Market Recap - 01/21/2026

The markets roared back to life this Tuesday, shaking off recent hesitation with a powerful broad-based rally. While earnings season is ramping up with major names like Netflix and Intel making waves, the catalyst for today's surge came from an unexpected geopolitical development out of Davos regarding a US-NATO framework for Greenland. In today's Trading The Close show, Pro Trader Drew Dosek at Verified Investing broke down the technical ramifications of this news, the resilience of the indices, and the explosive moves in the commodity sector.

The V-Shaped Recovery Phenomenon

One of the defining characteristics of the current market environment has been the sheer resilience of buyers. Despite multiple tests of support and momentary breakdowns, the S&P 500 continues to defy gravity with sharp, immediate recoveries.

In today's analysis, Pro Trader Drew highlighted a recurring pattern on the S&P 500 chart: a series of "V-shaped" recoveries that have frustrated bears and rewarded dip buyers. Recently, the index broke a key inclining trend line, a technical signal that typically invites further selling. However, rather than capitulating, the market staged yet another rapid reversal.

"Every little dip that's occurred has been a V-shaped recovery here in the markets… Tuesday we broke it, but then you can see already we're rocketing right back up."

This price action suggests an underlying bid that refuses to let the market correct meaningfully. Technical analysis provides the roadmap for where this momentum might stall. The S&P 500 is now approaching the top of a parallel channel at approximately $691.38. Beyond that, the retest of the broken trend line looms between $697 and $700.

This zone is critical because, in technical analysis, broken trend lines often turn from support into resistance. If the S&P 500 pushes into that $700 area, it would coincide with the psychological 7,000 point mark for the index—a level that is likely to trigger significant algorithmic and psychological reactions.

The News-Technical Paradox: Gold and Geopolitics

Today's session provided a masterclass in the relationship between technical levels and breaking news. Gold hit new all-time highs, surging 1.51% and looking poised to target the $5,000 mark. However, the timing of the intraday reversal was uncanny.

The market received news from Davos regarding a strategic partnership involving Greenland. While the equity markets rejoiced, Gold sold off sharply from its highs. To the untrained eye, this looks like a simple reaction to news. However, Pro Trader Drew pointed out that this news broke exactly as Gold was hitting a major technical resistance trend line connecting pivots from April and October of 2025.

"One of the greatest things about technical analysis is oftentimes we'll have news events when price on either commodities or stocks hits major levels of resistance. It's almost like a way of predicting the future."

This phenomenon—where news seems to "cause" a move that technicals had already predicted—is a cornerstone of professional trading. The chart had already identified the resistance zone; the news simply provided the catalyst for the rejection. For traders, the lesson is clear: rely on the levels. The narrative will often follow the price action, not the other way around. Despite the pullback, the broader structure suggests Gold is still targeting that psychological $5,000 level, potentially trailing the trend line higher in a manner similar to the small-cap indices.

Commodities on Fire: The Discipline of Natural Gas

If there was ever a testament to the value of patience and contrarian thinking, it was today's action in Natural Gas. After a catastrophic decline that left sentiment in the gutter, Natural Gas staged a massive reversal, rocketing up 33% in a single session.

This move didn't happen in a vacuum. Weeks ago, when prices were languishing near $3 at the bottom of a parallel channel, the technical analysis pointed to a high-probability bounce. Those who panicked sold at the bottom; those who trusted the technicals and accumulated positions were rewarded with a vertical move today.

"I was like, guys, this is a great level for Nat Gas… I didn't think we were going to see a bounce like this in one day. Up 33%."

The chart now shows Natural Gas catching resistance exactly where a trend line from August 2025 cuts through the price action. This precision reinforces that these markets are not moving randomly. Going forward, traders should watch $4.80 as the next major resistance, with support levels established at $4.31 and $4.08. The key takeaway here is not just the profit, but the process: identifying extreme oversold conditions at technical support is one of the most potent strategies in a trader's arsenal.

The "Shotgun Approach" in Oil

While Natural Gas provided a lesson in bottom-fishing, US Oil offered a lesson in breakout execution. Oil gained 1.88%, breaking a declining trend line. Typically, traders wait for a retest of the breakout level to enter. However, Oil didn't provide that courtesy—it broke out, consolidated briefly above support, and then ripped higher without touching the trend line.

This scenario illustrates why Pro Trader Drew advocates for a "shotgun approach" to entries on high-conviction setups. By scaling in—buying some on the initial move, some on the trend line, and some slightly below—traders ensure they have exposure even if the perfect retest never comes.

"Sometimes that happens with these sort of break and go plays… That way I didn't miss the move should an occasion happen like this where the price has just accelerated up without even tagging this declining trend line."

Oil is now facing resistance at $61, with a secondary level at $62.90. The energy sector's strength, combined with the moves in Gold and Silver, suggests a broader bid for hard assets is underway alongside the equity rally.

The Economic Barometer: Transports Signaling Strength

Often overlooked by retail traders, the Dow Jones Transportation Average (DJT) serves as a vital pulse check for the real economy. The logic is simple: if the economy is healthy, goods are being shipped, and people are traveling.

The DJT chart is currently painting a bullish picture that supports the broader market narrative. The index has formed a large inverse head and shoulders pattern—a classic bullish reversal formation. After breaking out, it is now testing resistance at a monthly topping tail around 18,246.

While the daily RSI is cooling off from overbought conditions (dipping from above 70 to 64.49), the structure remains constructive. A confirmed break above this resistance zone could trigger a measured move up to 20,500.

"That could be pushing the spiders up more. That could be pushing the Q's up more… Be paying attention to this index when you're doing your analysis."

If the Transports can clear this hurdle, it provides a strong confirmation signal for the S&P 500 and Nasdaq. It would suggest that the rally is not just driven by AI speculation or tech heavyweights, but by genuine economic activity.

Semiconductor Strength and The Earnings Gamble

The semiconductor sector (SMH) continues to lead, up 2.96% on the day. The technical setup here was a textbook breakout and retest. After breaking above an inclining trend line, the SMH retested the breakout level and bounced, validating the move. The target for this move is the top of the parallel channel at $430, representing roughly 8% upside from current levels.

Within this sector, Intel (INTC) staged a massive 11.72% run ahead of its earnings report tomorrow. This pre-earnings surge has pushed the stock above a key inclining trend line. However, trading into earnings is always a binary risk event.

For traders watching Intel, the levels are clearly defined. Upside resistance sits at $57.61 and $62.70. If the earnings report disappoints, support levels to watch are $46.42 and a more solid floor at $40.72. The weekly chart shows a declining trend line looming between $62.70 and $65, suggesting that even with a beat, upside may be capped in that zone.

On Semiconductor (ON) is another name approaching a critical juncture. It is consolidating below a resistance level at $64.67. A confirmed break above this level would trigger an inverse head and shoulders pattern with a measured move target of $94.20. This setup offers a favorable risk-reward ratio for traders willing to wait for confirmation.

Crypto and The Mania of Momentum

Bitcoin continues to trade within a structure that eerily replicates its 2021-2025 cycle. Recently, it broke down from a bear flag formation, putting bulls on edge. However, today's price action saw a significant save, with Bitcoin reclaiming the $90,593 level.

This level is the line in the sand. As long as Bitcoin holds above this trend line, the immediate bearish breakdown is negated. However, if it closes below, the probabilities shift heavily toward a test of the November lows and potentially the bottom of the parallel channel under $65,000.

"If you're a bull, you want to see Bitcoin get back above that trend line. That's going to save it, at least for the time being."

The "Musical Chairs" of SNDK

While Bitcoin battles for support, SNDK is in the midst of a historic melt-up. The stock is up over 100% since the start of the year and over 1,000% in the last six months. In just the last two trading days, it moved from a low of $412 to over $500.

These types of parabolic moves are exhilarating but dangerous. They represent a game of musical chairs where the music will eventually stop. Pro Trader Drew identified the next resistance at $530, but warned that the inevitable correction will be sharp.

"When this story is over… we will see a very sharp decline on SNDK, I'm anticipating price at least coming down to this $400 level."

For traders involved in such names, trailing stops and strict risk management are essential. The move is detached from fundamental valuation and driven purely by momentum and sentiment.

Conclusion: Navigating Volatility with Precision

As we look ahead to tomorrow, the release of Core PCE data at 10:00 AM EST introduces a new variable into the equation. This inflation data could either fuel the breakout attempts in the S&P 500 and Transports or provide the excuse for a pullback from resistance.

The market is currently characterized by extreme divergence—massive rallies in Nat Gas and specific tech names, alongside cautious consolidation in others. The "V-shaped" recovery mentality is strong, but as indices approach major psychological and technical barriers (like 7,000 on the S&P), the risk of rejection increases.

By focusing on the specific levels identified in today's analysis—whether it's the $90,593 save on Bitcoin, the $4.80 resistance in Nat Gas, or the $697 trend line on the SPY—traders can navigate this volatility with a probability-based mindset. The charts provide the levels; the discipline to execute at those levels is what separates successful traders from the crowd.