Folks,
Market Observations for the Week: The IWM printed a “Gravestone Doji” candlestick on Thursday and that is giving the US stock market another wave of corrective action as the market digest some Big Tech earnings from MSFT, META and AAPL on Wednesday/Thursday as well as geopolitical news from China. Uncertainty over several issues from the pending Supreme Court Ruling on tariffs to the vagaries of Trump’s new foreign policy initiatives are plaguing US capital markets. The close of our TRIN-5 indicator above 6.0 last week cautions us against getting too bearish here on the SPX. Still, holding a sizable cash position in this market is favored. Geo-political news from Iran and the big winter storm impacting the US has us watching the oil sector for some long setups in our favored energy stocks: XOM/CVX/COP/SLB. Gold tested $5000 on Friday and silver tested $100 . Stock selection will be key going into 2026, and we do favor an important intermediate peak in the SPX by May 2026. The XLE is coming into a seasonally strong period and is favored in our work for 2026. Our current investment positions were updated on the 1/9 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 1/13 to include: 20% cash, 10% SLV, 20% SILJ, 10% Barrick, 20% DIA, 20% XOM/SLB.
TURNING POINT DAY
Our turn window for this week is 1/26-1/27, the Tuesday Comex option expiration and Fed Wednesday.
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