# Big Market Breakout Incoming?

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Hey, Ross here:

If you’ve seen me break down price action before, you know I like to look for consolidation patterns after uptrends.

This is where after a stock has run up significantly…

It consolidates – often in a classic “shallowing” pattern – for a time as markets digest the move.

Only once this move has been fully digested can the stock break higher after.

For today, let’s look at a major consolidation pattern that’s formed – in the most-watched stock index of all time.

**Chart of the Day**

![](https://stocksurgedaily.com/wp-content/uploads/2026/01/image-5-1024x526.png)

This is the S&P 500, which is still trading below its end-October highs.

Those highs have formed a clear resistance level, which the index attempted to break (but failed to) around Christmas.

To some that may be a negative sign.

But if you look at the chart above, you can see that each dip – including the one over the past few trading days – has been following a classic shallowing pattern of “higher lows”.

That’s a classic shallowing pattern – and exactly what we want to see.

And here’s another interesting data point.

If you look at the closing price for the S&P 500 in end-October, end-November, and end-December…

You’ll find that they’re all within 1% of each other _(I’ve highlighted it on the chart below)._

![](https://stocksurgedaily.com/wp-content/uploads/2026/01/image-4-1024x500.png)

And historically, when that happens – it’s usually a positive sign for the markets.

![](https://stocksurgedaily.com/wp-content/uploads/2026/01/image-6-1024x315.png)

_Source: @SubuTrade via X_

Combine this with the shallowing pattern I just showed you above…

And I like what I’m seeing in the markets right now.

Plus, remember that the shallowing/consolidation pattern you just saw was in the _index_…

Something that has very important implications for traders.

I explain below.

**Insight of the Day**

**If the market is on the verge of breaking out, the leading stocks and sectors already are**.

Remember, the market is just a broad aggregation of individual stocks.

If the market is about to break out…

Then it means that _the leading stocks already are._

That’s what we want to be targeting right now.

If you recall, I showed you this in yesterday’s newsletter.

![](https://stocksurgedaily.com/wp-content/uploads/2026/01/image-7-1024x245.png)

These are industries that are already breaking out…

And that’s where a lot of my focus is – and where yours should be – right now.

Of course, most traders have no clue what these leading sectors are…

And they miss out on these opportunities as a result.

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**Customer Story of the Day**

_"By FAR !! the best way to understand the workings in the stock market. Ross and the team are the real deal, no BS._  

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Embrace the surge,

![](https://stocksurgedaily.com/wp-content/uploads/2025/11/RossSignature-1.png)

**Ross Givens**  
Editor, Stock Surge Daily