The Nasdaq Dorsey Wright team presents our "Weight of the Evidence" for 2026 linked here. This document explores the current technical pictures across the investable world, highlighting notable changes you need to be aware of ahead of what will undoubtedly be a busy 2026. Note, this document has been approved for Financial Professionals and Non-Professionals alike, so feel free to share with clients as you see fit. 

Dividend names have left much to be desired over the last few years. As you would expect during a stout bull market, dividend representatives have lagged behind major domestic indices since the start of 2023. SCHD has gained just 26.55% since 12/31/2022, including dividends… a metric that hardly compares to the >80% sole price return for the broader S&P 500 SPX (nearly 90% including dividends). All this to say, those looking for dividend representation within their portfolio certainly don’t feel like a cash flow machine….and it’s safe to say for many the broader dividend factor is on thin ice for many heading into 2026.

Despite the general underperformance over since the beginning of the 2020’s, the start of the new year has been rather kind to the dividend space. Up just under 3.5% through 1/12, performance for an Invesco high dividend representative PEY is the 4th best opening to a year dating back to 2000. It goes without saying that a mere 12 days of a calendar year are by no means a significant predictor of the rest of the year, but it is at least conversationally interesting to observe historical trends after “strong starts”. The table below details each yearly return for PEY since 2012. There have been five total instances during which the fund opened up the year up more than 3% (not including 2026). In those years, PEY continued to advance for an additional 7.9% for the rest of the year (1/13-12/31) compared to the overall of 5.39% over the entire period. Point being, there does seem to be some weight to the idea that a strong full year typically starts off with a productive open. Note that full year returns do not include dividends in our table.

PEY maintains a poor fund score but does present quite an interesting technical picture as we open up 2026. While it only earns a 1.10 fund score, it reversed back up into X’s on its default P&F chart to challenge its negative trend line at current levels. A second consecutive P&F buy signal at $22 would mark the funds highest point since late 2024 and the first pair of consecutive buy signals since early 2022. Of course, there is a range of resistance in the low $20’s interested parties need to be aware of and we would like to see further technical improvement before calling the fund “strong” by any means.

With the understanding that many dividend focused funds have yet to establish strong technical pictures as we open up 2026, it may suit many of you to go out and search for strong names underneath the hood of broad representatives. To do so, you can utilize NDW’s security screener. For those of you with access to NDW’s new AI screener, you can utilize the following prompt to screen for technically acceptable dividend stocks that have advanced so far in 2026.

“Look that the holdings of SCHD and PEY and screen for stocks with 4 & 5 technical attribute points that have gained 3% or more so far YTD”

For those of you without the AI screener (or still wanting to utilize the old screener) you can run a similar screen by following the directions below. Note, the “old” screen doesn’t allow you to filter stocks by YTD performance, so simply organize the 24 results based on YTD performance when viewing the results to see which names have moved the highest so far this year. For those of you looking for the "original screener" via the new tool, look in the top right under the search bar. The old screener and all your saved screens will be present here.

It is important to remember that dividend names remain laggards based purely on their long term strength. Despite this, action so far in 2026 has been productive, giving us something worth watching throughout the upcoming year. Remember, utilize the overarching technical attribute score when looking for direction as you search for positions.

International equities had a banner year in 2025. The broader asset class ended last year second out of the six major asset classes in our DALI rankings, but saw continued near-term momentum since the end of April. Underneath the hood, sharp improvements from some focused areas have contributed to that recent strength.

Capitalizing on strength in international equities can be difficult. Different countries have different economic drivers to consider. There are also a multitude of different factors that can affect the price action of individual securities within each country. This often leads to increased dispersion between leaders and laggards in foreign markets, producing big winners but also big losers. Using a momentum-focused approach can be beneficial here, allowing a defined process to determine the strongest securities while avoiding the weakest ones.

Our international Technical Leaders indices seek to do just that, taking broader inventories from developed markets and emerging markets then only focusing exposure on the 100 names from each list that have demonstrated the strongest momentum. This includes the indices behind the Invesco Dorsey Wright Emerging Markets Momentum ETF (PIE) and the Invesco Dorsey Wright Developed Markets Momentum ETF (PIZ). Both indices were reconstructed at the end of the most recent quarter, leading to some allocation shifts to better align each strategy with areas of improvement.

Developed Markets

The Invesco DWA Developed Markets Momentum ETF (PIZ) saw 42 changes in the most recent evaluation. This was more than the previous number of changes in the third quarter (28). There are 23 countries represented, including 16 that saw an allocation shift. Canada is now the most overweight country at 17.3%, adding 4.1% in new allocation. The United Kingdom saw the second highest new allocation added at 3.4% bringing its total allocation north of 10%.

On the sector side, finance remains the top holding at 42.3% and saw the largest allocation adjustment this quarter at over 11%. Non-energy minerals also saw a significant allocation increase, adding over 5% to bring its total allocation to 11%.

Emerging Markets

The Invesco Dorsey Wright Emerging Markets Momentum ETF (PIE) saw more allocation shifts than PIZ at the end of last month, as 50 names were swapped out for new positions. This was also higher than the allocation shift in PIE at the end of Q3, but not to the same magnitude as we saw in developed markets. There are 12 countries represented in the holdings, eight of which saw changes. Taiwan saw the greatest number of new names added, picking up 18.8% in new allocations to bring its total weight to 43.8%, making it the largest country weight in the portfolio. China saw the second greatest number of names added, representing 11% in new allocation, but its total allocation fell to 16.7%. This was a notable decline from the 33.7% in total China allocation last quarter. These two countries alone still make up over half of the fund’s total allocation.

From a sector standpoint, finance saw the largest increase in allocation, picking up 9.6% to now make up over 29% of the portfolio. Electronic technology continued to see a notable pick-up in new allocation, moving to 23.9%, but lost about a percent in total allocation. Energy minerals saw a spike in new names, adding 6.7%.

Altogether, these changes reflect a continuation of the relative strength trend that has produced improvement for international equities in recent quarters. Both PIE and PIZ are seeing wider sector and regional participation, which is a positive sign for the momentum-based strategies these indices represent. Markets will likely change somewhat over the next three months, and the process behind these strategies will push them toward the strongest areas at the next quarterly evaluation. However, the consistent leadership displayed from the broader international space throughout 2025 leaves them well positioned heading into the new year.

Daily Option Ideas for January 13, 2026