A NDW Christmas Story

‘Twas the night before Christmas and all through the market

Not a ticker was stirring, not even Tesla nor Target.

The Point and Figure charts were updated after close with great care,

In hopes that more buy signals would soon be there.

The traders were nestled all snug in their bed,

With all-time highs dancing at the front of their head.

The analysts on their laptops, working hard as hard as can be.

“The markets are up!” They said with great glee!

When over on DALI there arose such a clatter, 

I sprang to my screen to see what was the matter. 

Midyear they drifted, a change in the tide, 

But Domestic’s back leading, with Global beside.

The intra-day upticks they caused me to rue

With equities at all-time highs, pullbacks sometimes seemed overdue.

When what to my wandering eyes did appear,

MMPR below 5? That’s a reason for cheer.

Oh how the markets can turn on a dime,

A reason to be tactical each and all of the time.

Although just buying tech has been fun…

You never know when a new trend has begun.

Oh what a treat to see what was before me

Coming down the chimney was Good Old Tom Dorsey

Tactically tilted, the accounts settled in,

As RS charts will find the places that win.

“On NVDA, on GOOGL, on Large-Cap Growth we depend, 

Off Staples and Real Estate, Energy we can’t recommend

This year’s returns have been ones to display,

Now rally, now rally, may the market rally each day!"

From here our little story is not worth predicting,

As leaders and laggards they are always shifting.

And while no one can tell what’s next on the docket,

It’s the ability to adapt that keeps money in our pocket.

From Bitcoin, to Equities, to Crude to TIPS

The one constant is change, so have a plan for the dips.

With alerts set on the models and eyes on the bell,

Momentum can help identify the right time to sell.

And with that, we close the book on what's been a pretty good year,

We can hope these returns continue, and don’t disappear.

From the team at Dorsey Wright as 2026 comes into sight,

"Merry Christmas to all, and to all a good night!"

As chartists, particularly PnF chartists, we have been trained to look for patterns we can take advantage of. Whether that be finding the newest shakeout pattern on a 5 technical attribute stock or knowing what might happen during a falling dollar environment, understanding patterns can help us gain context into overall market movement thrown at us each day. Part of pattern recognition is utilizing history as a guide for future action… as the saying goes history never repeats but it often does rhyme. With that in mind, we will take today’s feature to observe what history might suggest is coming down the chute in 2026 for momentum.

To do so, we will utilize price action for proxy MTUM since 1993. From there, we can attempt to judge whether momentum carries “momentum” from year to year. As most of us know, it has been quite a productive pair of years for momentum, seeing MTUM best the broad market SPX by ~8.5% in 2024 and ~5% in 2025 (through 12/19). This comes after a historically poor showing for the factor in 2023, whose 7.51% gain lagged nearly 17% behind the broad market… it’s worst year in our observed history. Now nearly 3 years later, MTUM maintains a strong 5.10 fund score, having reversed back into X’s on its default chart to close out November. Support is offered just below the middle of the trading band at $235, which will be an important point to defend in the new year. A pullback to that point would represent a near 8% pullback.

The scatterplot below journeys back to this idea of momentum’s momentum from year to year. The X axis represents the previous year’s outperformance. Note that “outperformance” could still come with an overall negative year… it more so matters if MTUM beat our benchmark SPX. From there, we can observe the next year’s first quarter performance against SPX, plotted on the Y axis. For example, we highlighted 2024’s 8.58% calendar outperformance, which MTUM then followed up in Q1 2025 with an additional 2.27% gain over the benchmark. All this to say, data points in the top right of the graph suggest momentum continued to outperform in Q1 after doing so the previous year. Some high level statistics:

• MTUM has beat SPX in a full calendar year 22 times since 1993. That’s roughly 66% of the time.
• Of those 22 instances, MTUM has continued to outperform the market in the first quarter of the next year 15 times, or roughly 68% of the time.
• When we “hit” (meaning momentum outperformed in the previous year and Q1), it does so by an average of 3.04%

Point being, there is some credence to the idea that momentum’s momentum will follow through into Q1 2026. On average, MTUM advances in the first quarter of any year by roughly 2.75%. This is the 2nd worst (or third best!) of any quarter on average, only beating the sub 1.5% typical gain for Q3.

Remember…. averages are hardly ever hit on the nose, so chances are actual results will differ wildly from the ones explored today. Regardless, today’s study should give you some ammo for those inbound client calls asking if momentum is due for a pullback because it has done relatively well over the last few years.

Reminder: NDW offices will be closed on Christmas Day. Our team will return Friday, December 26th. Safe travels to wherever you find yourself this holiday season.

Each week the analysts at NDW review and comment on all major asset classes in the global markets. Shown below is the summary or snapshot of the primary technical indicators we follow for multiple areas. Should there be changes mid-week we will certainly bring these to your attention via the report.

Remember, these are technical comments only. Just as you must be aware of fundamental data for the stocks we recommend based on technical criteria in the report, so too must you be aware of important data regarding delivery, market moving government releases, and other factors that may influence commodity pricing. We try to limit our technical comments to the most actively traded contracts in advance of delivery, but some contracts trade actively right up to delivery while others taper off well in advance. Be sure you check your dates before trading these contracts. For questions regarding this section or additional coverage of commodities email james.west@nasdaq.com.

Data represented in the table below is through 12/23/25:

Portfolio View - Commodity Indices

Daily Option Ideas for December 24, 2025