The TML Report February 6, 2026 – Bifurcated Market

Market Overview

The Dow broke out to new all-time highs on Friday, clearly leading the major indexes higher. Conversely, the NASDAQ continued to trade below all of its key moving averages except its 200-day, after breaking sharply lower on heavy volume three days ago.

The S&P 500 closed in much better shape. It’s trading just slightly below its short-term 10-day SMA, at not too far below its prior all-time high. The Russell 2000 also closed well on Friday. It looks like the small-cap index is headed back toward new highs along with the Dow.

The health and breadth of the market’s leadership are in decent shape as earnings season goes on, and the process of rotation continues. Some leading groups are in much better shape than others. Forexample, names like SNDK and VIAV refuse to trade below their 10-day SMAs, while RKLB and PL are workibng on holding recent pullbacks to their key 50-day SMAs.

This isn’t surprising, given the extreme bifurcation and wild volatility we’re seeing in the major indexes and across the market’s leadership. This has created an unfavorable environment for position traders to initiate new positions. However, given the market’s volatility, conditions can change quickly.

Remember, having favorable market conditions and a cooperative environment makes things much easier. Depending on your style, there’s no rush to buy stocks here. However, there’s nothing wrong with it as long as the risk is well managed.

Indexes

QQQ

Even after Friday's powerful rally, the NASDAQ continues to struggle below all of its key moving averages other than its 200-day SMA.

SPY

The S&P 500 has acted significantly stronger than the NASDAQ over the last few days and finished Friday's session in much better shape. It closed back above all of its key moving averages except for its short-term 10-day SMA and only slightly below its prior all-time high.

IWM

The Russell 2000's pullback to the 50-day SMA on Thursday was followed by a powerful gap-up and breakout attempt by the Small Cap Index on Friday, and looks like it's setting up to go higher.

DIA

The Dow was the leading major index on Friday. The Industrial Index broke out to new all-time highs on heavy volume.

Focus List

AAPL

Ideally, I'd like to see AAPL pull back a bit from here and shake out before retaking its $277.84 pivot point and heading high.

INTC

Watching for INTC to resolve to the upside from here.

ASML

ASML is a top leader in its group, which I'm watching for to resolve to the upside from here.

SNDK

SNDK is one of the most powerful, highest quality leaders in its group, barely touching its 10-day SMA recently. I'm watching for it, to resolve to the upside from here.

ONTO

If ONTO can continue to push through near-term resistance, its next key area will be through its prior all-time high from back in July of 2024, a green line breakout that could ultimately go much higher.

VIAV

Like SNDK, VIAV is one of the highest quality, most powerful names in its group, only touching its 10-day moving average recently and looks ready to continue higher from current levels.

APLD

APLD looks like it could shape up with just a few days of constructive action from here and is worth keeping an eye on for a potential entry area to develop.

STRL

as TRL broke out of a cup and handle base on Friday. I'm watching for an entry on constructive weakness.

BTU

BTU pulled back constructively over the last few weeks, and Friday's action looks like an attempt at a re-breakout through prior all-time highs. A green line breakout that could result in much higher prices from here.

SEPN

SEPN has formed a constructive flat base above its prior all-time high and looks like it's getting ready to move higher along with the rest of the group.