Reward 500 Tiger-coinsOn January 21, 2026, $S&P 500(.SPX)$ logged one of its largest single-day gains since last November.
Trump quickly reversed the market’s early-year slump after announcing at the Davos forum a delay of the tariffs on Europe originally scheduled for February 1, and claiming that a “framework agreement” had been reached on Greenland.
Markets interpreted this pivot as a classic “TACO” (Trump Always Chickens Out) moment—where extreme pressure triggers sharp volatility, followed by a White House retreat or compromise.
Historically,“TACO trades” have often been followed by strong upside.
Looking back to the April 2025 “Liberation Day” tariff, the S&P 500 suffered only a brief pullback before policy delays sparked a nearly 40% rally spanning into the following year.
The current foundation remains solid: across 36 major geopolitical events since 1940, U.S. equities rose in the subsequent three months 60% of the time.
More importantly, the recent turbulence has proven to be an excellent buy-the-dip opportunity, as it was driven not by recession risk, but by policy flexibility creating a temporary sentiment premium.
Earnings Season in Full Swing: Can It Further Support Valuations?
Q4 corporate results have provided a firm floor for the broader market.
Analysts of Factset expect double-digit profit growth across all quarters of 2026.
Over the past ten years, actual earnings reported by S&P 500 companies have exceeded estimated earnings by 7.0% on average. During this same period, 76% of companies in the S&P 500 have reported actual EPS above the mean EPS estimate on average.
The latest data from Bank of America (BofA) and JPMorgan suggest that this robust earnings cycle is offsetting tariff-related valuation concerns.
Technical signals further reinforce the sustainability of the uptrend. Last week, roughly 70% of S&P 500 constituents were trading above their 200-day moving averages, while both the Russell 2000 and the equal-weight S&P 500 hit new all-time highs, indicating broad market breadth.
Discussion
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Does the TACO pattern remain the most reliable signal for adding exposure in U.S. equities?
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Now that the S&P 500 has erased its 2026 losses, do you think we could see double-digit percentage gains over the next three months?
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With earnings growth staying strong, would you stick with the S&P 500, or rotate into the higher-beta Russell 2000 small caps?
Share your trading plan in the comments and earn Tiger Coins! 🐯
Comments
With the S&P 500 $S&P 500(.SPX)$ now erasing its early-2026 losses, I think double-digit gains over the next three months are achievable, even if volatility persists. Earnings remain the backbone of this move, and improving breadth suggests the rally is healthy rather than narrowly driven.
Positioning-wise, I’m keeping the S&P 500 as my core exposure while selectively adding higher-beta names. New highs in small caps are encouraging, but I prefer scaling into the Russell 2000 on pullbacks instead of chasing momentum.
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Check them in the history - “community distribution“
TACO模式（特朗普总是退缩）是2026年初的一个关键行为金融概念，它描述了一个周期，即激进的政策或关税威胁导致市场抛售，随后是引发快速缓解反弹的转向或谈判……
随着标普500抹去2026年的损失并重回绿色，未来三个月实现两位数百分比增长的前景是可行的，但维持势头将取决于强劲的盈利增长、有利的利率和稳定的通胀作为推动市场前进的关键催化剂
虽然标普500可能是广泛市场敞口的更安全选择，但如果风险偏好强劲，转向贝塔值较高的Russell 2000小盘股可能是下一季度的高信心投资，后者提供了更大的潜力，但波动性是有代价的
I think the s&p500 could potentially see double digit returns in the next 3 months as earnings have been strong and job market also has remained resilient. All of these point to a strong economy that should continue to deliver in the next quarter. This is of course barring any freak incidents or crazy announcements by trump like hiking tariffs along.
I think the s&p valuation has hit historical averages and going along the higher end. So I feel that it is better to rotate to the small caps which may yield greater returns compared to the s&p500, especially with the mag7 concentration in s&p500.
With the S&P 500 back to flat YTD, double-digit gains in 3 months is possible but not the base case. I’d frame it as +4% to +8% unless we get multiple upside catalysts (clean earnings beats + softer inflation + clearer rate-cut path).
Rotation: I’d still anchor in S&P 500 (quality + AI leaders), and only add Russell 2000 tactically if:
yields stop rising,
USD cools off,
and breadth improves (small caps need easier financial conditions).
My plan: Core long SPY/QQQ, buy dips on headline-driven flushes, keep dry powder, and add IWM only on a breakout + falling yields. Not financial advice.