Good morning, traders…
Tuesday was the worst day for the S&P 500 since October.
A surprise announcement from the White House about new tariffs (up to 25% on several European nations) tied to negotiations around U.S. military presence and strategic claims in Greenland.
European leaders pushed back immediately, and traders started pricing in trade war risk.
Stocks fell hard, bonds got dumped, volatility spiked, and metals soared past multi-month highs:
Risk-off sentiment took over in a single morning.
Moves like this shake out weak positions, reset technical levels, create fresh setups, and reveal where the real support and resistance live.
If you were sitting in cash or kept your size light, you’re positioned to capitalize on what comes next. If you were overleveraged, you just paid tuition on the importance of risk management and flexibility.
The selling created opportunities that patient traders have been waiting for.
Names that were stretched are now pulling back to support, the indexes are making higher lows, and the technical indicators are hitting a clean slate.
Most importantly, these conditions are setting up high-probability swing trades (if you know where to look).
Here’s What Tuesday’s Selloff Means For Your Strategy…
Why Stocks Cratered On Tuesday
As I predicted two weeks ago, 2026 is all about economic policy.
President Trump announced that the U.S. would impose up to 25% tariffs on several European nations unless they agreed to terms around the U.S. military presence and strategic claims in Greenland.
Traders instantly viewed it as an escalation that could lead to a broader trade war.
That spooked everyone, from institutional desks to retail momentum chasers.
You don’t mess with trade flows or global alliances without market pushback.
But it’s not all bad news.
There are ways to take advantage of this sell-off…
How You Can Take Advantage
Look for Bounce Zones and Oversold Levels
Tuesday’s drop put hundreds of charts into new categories.
Previously middling stocks are now way oversold. Charts that were overextended pulled back to moving averages.
Watch stocks with strong weekly charts that just kissed support.
Look for names holding the 50-day moving average or near October lows.
That’s one of the best risk/reward spots for a potential bounce.
Watch Defensive Sectors
While tech bled, names in utilities and consumer staples held their ground, while gold and silver continued making new highs.
That rotation could continue if policy fear lingers.
Watch ETFs like XLU or XLP. Note the relative strength and weakness.
Wait for Policy Clarity
As predicted, 2026 is shaping up to be policy-driven.
Barring clear de-escalation from Washington or Europe, expect more chop.
But when those headlines shift, the reversal could be quick.
Moves like Tuesday don’t happen often.
But when they do, they separate the wheat from the chaff.
If you were caught long with too much size, let it be a lesson in staying flexible and hedged.
If you were in cash, puts, or light exposure, well … that didn’t suck. Let it be a reinforcement of your risk management.
I think this market has more upside left in it.
The broader trend hasn’t broken, but volatility around the Greenland narrative could reset the clock on momentum.
Which is a great time to look for new entries…
That’s why I’m hosting a special 2-day Options Bootcamp next Tuesday, January 27th – Wednesday, January 28th.
Because despite the chaos of the last few months…
We’ve still been able to catch some of the biggest moves in the market, like:
+52% on AAPL (1 day)*
+100% on TSLA (same day)*
+215% on CMCSA (2 weeks)*
+100% on AAPL (1 day)*
+100% on META (same day)*
+200% on HOOD (2 days)*
+294% on GOOGL (4 days)*
I want to show you exactly how we’re doing it…
The scanners, the indicators, and the strategy…
Click below for everything you need to know about the bootcamp:
Happy trading,
Ben Sturgill
*Past performance does not indicate future results
