Although the Santa Claus rally the markets expected ended before ever starting, the "Big Three" still ended 2025 with a bang: The NASDAQ finished up roughly 20%, the S&P 500 gained about 16%, while the Dow Jones lagged at 13% but finished the year strong — exactly what seasonal traders expected.

That late-year strength in the Dow didn't surprise me at all. Seasonally, it was set up to be the caboose early, and the finisher late. And that's exactly what happened.

So, what does that tell us about the road into 2026?

From a pattern and seasonal perspective, there's still opportunity here. But it isn't a market where you just throw darts. Some areas are working, some aren't, and the difference comes down to timing and sticking to the pattern.

Strongest Sectors for 2026

1. Large-Cap Technology & Index Leadership

The clearest leadership remains at the top of the market.

The NASDAQ outperformed both the S&P and the Dow in 2025, and the broader trend remains intact heading into early 2026. From a rules-based perspective, this tells me institutional money is still favoring scale, liquidity, and earnings durability.

That doesn't mean every tech stock works—but index-level exposure and mega-cap leaders continue to do the heavy lifting.

2. Precious Metals

Gold and silver quietly turned in some of the strongest performances of 2025, even after already posting gains the year before.

That strength lines up with two macro patterns I pay close attention to: a weakening U.S. dollar and a bond market stuck in a "Goldilocks" range rather than breaking down or overheating.

As long as the dollar remains under pressure, metals stay relevant in 2026.

But that strength isn't showing up everywhere—and a few areas of the market continue to struggle.

How to Trade Volatility When Geopolitics Take Control

When headlines become the catalyst, traditional setups lose reliability. Matt Maley shows how he trades volatile, macro-driven markets, including how he manages position size, uses options to define risk, and avoids forcing trades during sharp reversals. Learn the Setup

Weakest Sectors for 2026

1. Housing & Real Estate

Housing-related names continue to lag. Homebuilders and real estate remain sensitive to rates, and the charts simply aren't showing leadership.

Until that changes, this sector stays on the defensive list.

2. Energy (for now)

Despite major geopolitical headlines—especially around Venezuela—oil and oil stocks have not confirmed a bullish pattern yet.

Headlines alone are not a trade signal.

From a seasonal perspective, oil does not typically begin its reliable move until mid-February at the earliest, with the stronger historical window running from February through May. Until that timing lines up, energy remains a wait-and-watch sector.

And when you take this one step further, a handful of stocks and ETFs rise to the top.

What to Watch in 2026

1. Visa Inc. (NYSE:V)

Visa stands out as one of the cleanest seasonal setups heading into Q1.

Over the last decade, Visa has averaged nearly a 6%-move between late December and mid-February, with that pattern improving in recent years.

If you're a stock trader, this is the kind of setup where owning the shares now and reassessing around mid-February makes sense. And if you're trading options, I'm looking at February call spreads, something that lets you target that 5–6% move without taking on unnecessary risk.

This is a timing trade, not a buy-and-forget position.

2. Mastercard Inc. (NYSE:MA)

Mastercard has started to firm up from a technical standpoint. The downtrend has broken, momentum has turned higher, and the stock is trading within a much cleaner support-and-resistance range.

That kind of setup doesn't require a big breakout to work—it's more about capturing a defined move.

That makes it a strong candidate for defined-risk bullish strategies, such as call spreads, where the trade is built inside a projected move rather than relying on a runaway rally.

3. Nasdaq-Linked Exchange-Traded Funds (ETFs)

When you zoom out and look at where leadership has actually been, it keeps coming back to the NASDAQ. It led in 2025, and the trend structure still points higher as we head into 2026.

If you don't want to rely on a single name, this is where broad exposure makes sense, especially during seasonally favorable windows. For me, something like Invesco QQQ Trust (NASDAQ:QQQ) is simply a way to stay aligned with what's working without having to be perfect on stock selection.

4. Oil Stocks

The crisis unfolding in Venezuela may have sparked a rush into oil stocks… but the price action itself told a much different story. 

Several major names spiked overnight and then sold off, a classic sell-the-news reaction. From a trend and seasonal standpoint, there is no meaningful January pattern and no early-February setup.

Until mid-February seasonality comes into play (which we'll talk about soon), chasing oil strength remains high risk, especially stocks like Exxon Mobil Corp. (NYSE:XOM), Chevron Corp. (NYSE:CVX), and United States Oil Fund (NYSE:USO). 

So where does that leave us heading into 2026?

Overall, the market is still trending higher, but it's no longer forgiving.

And remember, we're in a rare market cycle with a non-consecutive second-term president. In fact, we've only seen this once before in U.S. history. That throws the whole presidential cycle playbook into play as well.

So, this isn't a market for guesswork.

It's a market where you wait for the pattern to show itself—and then act.