Market Observations for the Week: The SPX made a low on Friday, 1/2 and the stock market is rallying hard into the first trading week of the New Year. The DJIA made an all-time high on Monday and the SPX is close to matching that. The big volatility that we saw for the SPX has been a strong trend up so far, so our caution is letting up to the point that we plan to buy 3-wave corrections in the DIA. The news from Venezuela will have us watching the oil sector for some long setups in our favored energy stocks: XOM/CVX/COP/SLB. How the SPX and gold/silver trade into January 9 will dominate our thinking into Q1 2026. The VIX could be tracing out an EW 1-2, i-ii to the upside and could still spike to give the SPX a slap in the face on the first trading week of the New Year. Stock selection will be key going into 2026, and we do favor an important intermediate peak in the SPX in Q1 2026 –XOM/CVX/SLB is coming into a seasonally strong period. Our current investment positions were updated on Monday’s close: 20% cash, 5% SLV, 15% DIA, 25% GDXJ/SILJ/XLE, 15% XOM/CVX/SLB and 20% physical gold/silver/platinum. We have a 25% overall allocation to our short-term trading account which was last updated on 1/5 to include: 50% cash, 30% SLV, 20% SILJ, 0% Barrick, 25% DIA, 25% XOM/SLB.
TURNING POINT DAY
Our turn window for the coming week is the 1/5-1/6, the Full Moon Timing Window.
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