ZenTrader Market Update: Policy Volatility Meets Record Highs

Pre-Market

Major indices remain pinned near all-time highs. Daily ranges continue to expand, and breakout frequency over the past four weeks supports sustained higher-timeframe momentum.

Shorter-term order flow remains aligned with the broader trend. Direction is not the constraint. Headline-driven volatility continues to introduce sharp, short-lived dislocations within otherwise constructive structure.

Frustration at new highs is understandable. Elevated price levels do not eliminate uncertainty when policy narratives shift rapidly.

News to Know

Crypto Stocks Absorb Policy Risk While Spot Crypto Holds

Crypto-linked equities continue to reflect regulatory uncertainty, while spot crypto prices remain comparatively stable.

The Digital Asset Market Clarity Act passed the House last summer but remains stalled in the Senate Banking Committee. Coinbase withdrew support over legislative language concerns, and committee leadership has paused progress.

Crypto equities sold off sharply before attempting modest stabilization premarket. Bitcoin (~$95,382) and Ethereum (~$3,305) remain largely unchanged, reinforcing that equity volatility is tied to policy expectations rather than underlying asset price action.

This divergence is important. Equity risk is being repriced on regulation, not adoption.

Intel’s Re-Rating Continues

Intel remains among the strongest large-cap performers exiting 2025, carrying momentum into early 2026.

The prevailing narrative centers on 18A foundry development and expectations that Intel could emerge as a top global manufacturer. Ongoing discussion around potential manufacturing partnerships continues to support price.

Valuation, however, is extended. Intel is trading at more than four times estimated sales, the highest level in over two decades. Industrial policy support and domestic manufacturing incentives are providing a tailwind, but execution will need to validate current pricing.

This has transitioned from a turnaround narrative to a valuation and execution regime.

Healthcare Reform Remains an Unresolved Risk

Proposed healthcare reform would redirect subsidies away from insurers toward direct consumer funding.

While structurally straightforward, the proposed contribution levels introduce uncertainty. Suggested Health Savings Account contributions (~$1,500 for ages 50–64) compare unfavorably with prior ACA subsidies that often exceeded $7,000 annually, while unsubsidized premiums can approach $15,000.

Policy analysts warn of potential destabilization in insurance risk pools if healthier participants opt out. Guardrails around usage and participation remain unclear.

This remains a developing risk rather than a confirmed catalyst.

Greenland Tensions Escalate

Geopolitical strain increased following failed negotiations between the U.S., Denmark, and Greenland regarding territorial control.

Strategic concerns center on Arctic trade routes and critical mineral access. European responses have included military exercises and warnings of economic retaliation. The European Commission is proposing to double its Greenland budget, signaling a firmer stance on territorial defense.

This is no longer a fringe issue. Escalation risks extend into trade, commodities, and defense.

What It Means for Traders

Current price behavior reflects policy uncertainty more than earnings or macro data.

• Crypto equities are trading legislative probabilities

• Semiconductors are pricing industrial policy and execution risk

• Global trade assumptions are being tested

In environments where rules evolve in real time, risk management and position sizing matter more than conviction. Patience remains an edge.

Market Analysis

Recent sessions produced opposing gaps that resolved counterintuitively:

• Bearish gap closed near the high

• Bullish gap closed near the low

From a swing perspective, price is compressing into a short-term range with overlapping sessions. This reflects indecision rather than distribution.

The broader uptrend that began in November remains intact, with price holding at all-time highs. Consolidation at highs continues to be a constructive condition.

Economic Reports (Friday)

• Industrial Production (MoM) — December

• Industrial Production (YoY) — December

Earnings Highlights

Before the Open: STT, MTB, CFG, PNC

After the Close: None

PNC Financial Services Group — Earnings Preview

PNC reports Q4 earnings before the open.

Consensus Expectations

• EPS: $4.19

• Revenue: ~$5.90B

PNC has exceeded earnings estimates in each of the past four quarters, averaging an 8.26% surprise. Shares have rallied approximately 14% over the past month and trade near 52-week highs.

Recent sector reactions suggest guidance may carry more weight than headline beats.

Key Areas to Monitor

• Net interest income versus ~$3.71B consensus

• 2026 NII guidance trajectory

• Loan growth relative to credit quality

• Capital markets fee income

• Progress on FirstBank integration

Volatility remains likely regardless of headline results.

Sector Rotation

Materials

Basic materials have paused, improving risk-reward conditions. Gold-related names show stacked bullish order flow.

Watchlist: CDE, NM, B, PAAS, SA

Energy

Crude volatility increased on Venezuela-related headlines. $62 remains a key resistance level.

Energy structure remains constructive, though patience is warranted.

Semiconductors

The group has stalled. Nvidia remains range-bound, with stronger relative order flow in secondary names.

Watchlist: MU, ON, MCHP, ADI, TXN

Industrials

Expansion continues, led by Aerospace & Defense and Integrated Freight.

Watchlist: DRS, TEX, ZIM, ODFL, FDX, GXO, CHRW, UPS

Industry Groups

Bullish

• Semiconductors

• Capital Markets

• Diagnostics & Research

• Aerospace & Defense

Bearish

• Software Infrastructure

• Software Applications

• Oil & Gas Refining & Marketing

Day Trading Pro

Daily Watchlist:

AMD, GOOGL, AMZN, COIN, JPM, TSLA, CVX, XOM, AAPL, BA, CAT, GE, NVDA, WMT, MU, ROKU, PLTR, RDDT

Infrastructure improvements for trade tracking are in progress. Updates will be shared as they are finalized.

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