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New Year, Day 1

Friday was fairly uneventful. Normal. 2026 tax year profit-taking did not seem to present itself to any major degree. The gold and silver miners got clubbed, while gold and silver tried to rally and faded. There were a lot of 2025 profits baked into the miners, to be taken. But the pullback was partially reversed by day’s end.

US and global stock markets biased positive. Commodity related stocks were generally positive, especially Uranium and the critical minerals space.

I had added junior miner short JDST to my DUST hedge position, but took the profit there also reduced DUST. Against this, as per the In-Week Notes, I added a couple items (DC, IDR, DVS) on pullbacks. Also per the notes on December 31st:

Happy new year, folks! I am choosing to view the thud the year ended with as possibly being permissive of a positive January. Whereas, had Santa made it to the finish line I’d have been more guarded.

It’s just a day. Tomorrow could bring a world of tax-selling hurt, for all we know. But so far, the “positive January” prospect lives to fight another day. I am ready to lever in more long, or more short.

Precious Metals

Let’s use daily charts for a closer view. The miners, gold and silver are very bullish and very overbought on the long-term charts. But it is time to gauge the shorter-term.

GDX made a high on December 26th, as Santa left a “hanging man” candle and a lump of coal for short-term traders. The Hanging Man came amid a negative RSI divergence.

Santa also left coal that day for broader markets. Then came the next few days of downside, opening the door for a more positive January view than originally anticipated. Since the miners have been leaders of the broad rally (i.e. not unique), I’d say that if the broad is positive in January, so too many be the miners (hence, the reduction in hedges).

Interlude

While I added a couple precious metals stocks (DVS, DC and to the degree of its small gold mine, IDR) on Friday, my personal plan is to watch for expansion to the wider critical and standard commodity space for macro reasons written about so often lately.

But the trick, again speaking personally, is to understand whether an interim market liquidity problem will erupt and if so, when it will do so. With a “positive January” prospect viable, it could come after a final suck-in rally in January. Then later in the year, potentially much later after a deflation/liquidity scare of some kind, the wider inflation trades (cue Fed rate cuts, QE, obedient Trump robot chairing the Fed, big beautiful spending bill) could begin.

Or who knows? This week could just shit the bed. But on viable plan (among others) is…

• Positive January
• Broad markets turn bearish in line with the February seasonal average
• Liquidity problem ensues
• Unrestrained Monetary & Fiscal inflators to the rescue
• “Inflation Trades” present a buy opportunity
• Stagflation arises, making the angst of 2021-2022 look like quaint memories

Again, there are several other forms and time sequences that the above can take. For example, one other option is that the “inflation trades” have already begun (the Gold/Silver ratio, shown below, offers the biggest caveat to that).

But I am trying to cobble a map that makes sense to start the year. It will be confirmed or altered as needed moving forward on a week-to-week basis.

Gold & Silver

Friday’s public post had a lot of detail on silver, silver/gold, inflation, stagflation, the arguments for/against a classic silver smash job and the wider macro view in gold vs. the stock market. But for our near-term technical management, let’s just keep it simple with these daily charts.

You would think gold would at least make a try for a healthy test of the short-term support coinciding with the 50 day moving average after its negative RSI divergence at the overbought recent high.

Silver is where the action is, of course. That action is currently grinding up and down day to day, as CME tightens margin requirements and the silver market buckles.

The logical expectation would be that as in 1980 and 2011, such actions by a commodity trading authority would bring some terrible downside. And if you consider a drop to the 50 day average (57 and rising) terrible, then that could well happen.

That is the logical expectation. But as yet silver has only consolidated. A clear loss of 70 would very likely bring on a decline to the 57-60 area. That is logic, an extrapolation of history. But until silver breaks down, I am just not so sure “logic” will prevail in the short-term. We’ll find out soon enough.

One observation I have made over the years about historical analogs is that when they are seen pervasively enough, they often fail to play out. Well, even my cat knows that silver topped in 1980 and 2011 due to tightening margin/futures trading requirements.

For safety sake, let’s assume silver is going to get cracked hard. But let’s keep in mind that everybody is expecting that, and often in markets you don’t want to be everybody.

That said, I would love to play hero again and short/buy puts on silver down to 60. It looks obvious. But I am shall we say, chicken, unless silver slips support.

I will most likely either increase my hedges (DUST/JDST) again and try to short a bit of silver if the PM complex slips bearish, or continue on with the ‘positive January’ theme and get rid of remaining hedging. Sounds simple enough, anyway.

Questions From a Subscriber

EZ provided me with a lot of background on her trading methods and tools. She is confident in her ability to manage that end of the silver market. The “price” end. But she asked my opinion on other areas:

Can I expect SLV to continue tracking price levels in the physical market? It is a derivative. It does own some physical silver, but it’s unclear how much.

I manage the macro and am not an authority on manipulations and grift that may be going on inside a paper/derivative market. That said, I have used PSLV instead of SLV because while you’ll never get your hands on Sprott’s metal, it’s there at least. Also, it often can be bought at a discount to the NAV of its silver holdings.

The United States has declared that silver is a critical mineral. I own physical silver stored in a reliable vault. I see a clip on YouTube that says “Silver is Banned.” Could the government take away physical silver that I own? I recall that in 1933 the government required people to hand in their gold and gave them paper money in return.

I would have more such concern about gold than silver. Let’s not over-rate silver. It’s utility is increasingly industrial. There is a ton of it above ground and at a certain price grandmas all over this nation will be disgorging their dinnerware to be reprocessed for industrial use. The advantage silver has over copper, platinum, REE, etc. is that it is also thought of as gold’s little monetary brother.

YouTube exists to make headlines that grab your eyeballs so the Algo can keep feeding you what you want. Content producers know this and so they feed the Algo what it wants. While there are some good people out there promoting their views, almost all of them put up bullshit headlines in order to get your attention. Frankly, and on the whole, I’d take YT content dorks with a large chunk of salt. They have come for your eyeballs, primarily. That’s the job of YT. Within that, you’ll find good content and really bad content.

The government is not confiscating your silver any time soon and likely, never. With one caveat: Trump, a wildcard who does as he pleases as long as he holds his office.

…when it comes to these big general questions about investing in paper derivatives on the one hand, or investing in physical silver and gold on the other hand, I would really appreciate knowing your thoughts and any information you could share.

With either gold or silver, of course physical is a whole other league than the paper markets, including “unencumbered”, fully allocated holders like Sprott, and others of its kind.

But with Trump as president, anything is possible. He just took over Venezuela because he could. He made a big deal about auditing Fort Knox, and then suddenly STFU about it, never to utter anything about it again (that I know of). He is slapping his name on institutions he has nothing to do with, sanitizing American history and basically turning the country – and some other parts of the world – into Trump World.

Until he is stopped by his own base, that is. We have a president, along with a made-for-TV cabinet, doing as he pleases. He has jumped the tracks from most of MAGA’s most closely held ideologies.

We now live in a country where anything is possible; sort of like Wonderland.

None of this is normal. America – for the time being – has a Dear Leader who does as he pleases, while he is allowed to do as he pleases. I would not put it past him to confiscate all the gold in America and shove it in White House’s basement (if it has one). He is a man who takes. He is a man who wins. Duh. I am riffing and using some hyperbole here, so please work with me.

So, pending Trump’s ability to remain in office, you tell me how this plays out. Anything is possible. But all I can do is be the simple guy I am and say physical is physical (as long as you’ve got it kept safe somewhere, even outside the country) and the other crap, SLV, futures, and to a lesser degree, PSLV, are something much different and dependent on data servers for you to even have proof that you supposedly “own” it.

It’s best to view SLV and PSLV (and the leveraged derivatives spun off of them) as components of the stock market that follow the price of silver… until maybe they don’t if something breaks. In that event, PSLV, actually accounted for in vaults, would stand a better chance of reflecting actual silver prices in my opinion. I have no argument about whether SLV actually holds the bullion it is supposed to have because I really don’t care. It’s a price vehicle as long as it works well as one, not an investment.

But again, I do not make my living telling spy mysteries to transfixed gold and silver bugs, sleuthing the seedy underworld of digital/paper/futures trading. I do not put stupid titles on YouTube videos to grab eyeballs as a primary function. I just follow gold and silver, among many other markets, and analyze those markets from the perspective of actual metal and the miners (and royalties, explorers) of those metals.

Physical is for real value. Trading the derivatives is for making paper gains as long as the market functions normally. As a side note and as we know, CME Group is already attempting to modify the market’s “normal” function with increasing margin requirements. But what came first, the “physical demand” horse or the futures/”derivatives trading” cart where the current silver price is concerned?

As with gold, most physical metal holders stack and hold and hence don’t have to worry about the market-influenced price during any given phase.

Commodities

This is where a lot of 2026 focus is likely to be. This weekly chart of the Commodity ETF, DBC shows the sector on the cusp of breaking its 3.5 year consolidation. I have inserted the fund’s holdings into the chart for reference. It’s interesting that Diesel fuel is the #1 holding. Then followed by Gasoline, Brent & WTI, with NatGas up there too.

Thus, DBC and the broad commodity indexes are waiting for the Energy commodities to bull. It’s been long wait. But there is a historical analog that sees crude oil following gold by about 2 years (+/-). FYI, gold got going in February of 2024. Employing my estimable math skills, 2 years is next month.

Due in large part to silver’s implied price vulnerability and the extreme low in the Gold/Silver ratio (chart taken from the new ‘live indicators charts‘ page at nftrh.com, which you may want to periodically reference), I continue to have near-term caution on commodities and the “inflation trades”.

The question I have now is do we squeeze in a bullish January first? A secondary question is will the silver market fail to play out to the logic of its historical analogs and perhaps break the Gold/Silver ratio for real?

Important questions, folks.

The bottom line is that for my purposes, this is no time to abandon the week-to-week strategy that worked so well in 2025. I will present a combination of the technicals (across several markets), the big picture macro and the near-term risks. From there, we are at least armed and ready for what the markets decide.

For commodity-related items I am currently holding:

REE: MP & IDR

u3o8: CCJ

Energy (Gas): AR & EQT

Copper: TECK

Multi-metal Exploration: MMG.V, PGE.V, AE.V, AIR.V

Royalty ELE can also be included after it merged with EMX.

Watch list includes: SLI, LAC, LYSDY, UEC, UUUU, URNM, SPPP/PALL/PPLT, TLO.TO, BTT.V & FCX.

Stock Markets

Here too, I am open to a positive January. Especially since history has proven that even in the event of a Gold/Silver ratio snap-back, stocks – especially Tech stocks – can thrive if the backdrop is disinflationary, with a Goldilocks flavor, rather than an all out liquidity crisis.

The leader of the SOX > NDX > SPX chain, the Semi sector, did its job on Friday, painting a positive leadership picture over Tech (NDX) and broad (SPX). Now NDX needs to gather itself and hold here. If that happens it could be a giddy January. A breakdown in NDX/SPX could portray Semi as being on a head fake.

SPX barely ticked an all-time high on a negative RSI divergence the day Santa left on Dec. 26. Now it is sagging for a test of the SMA 50. Above the SMA 50, there is nothing wrong here. Below it, there could be something wrong when factoring the negative divergence.

NDX made its high way back on October 29 with a little Hanging Man candle at a point of negative RSI divergence. As per the leadership chart above, NDX retains leadership. But any breakdown from here will be a warning on the markets (and perhaps paint Semi as getting played by the machines).

But considering SOX > NDX > SPX, and NDX’s fairly intact chart, the bulls still have the ball.

So what of the Semi index? First off, with so many up gaps, I could not keep up and stopped filling them in on this chart. Friday could easily be a ‘gap ‘n trap’ for bulls who chased it. But if Semi takes out resistance at its previous high of 7490.28, well… you know.

US Market Sentiment

Smart/Dumb money indicators are aligned contrary bearish and risk is high, according to Sentimentrader. *

* A note that during my medical treatments I let this subscription lapse, as I was, you know, distracted and putting all of my attention on native NFTRH analysis. Then I found out that ST had increased their subscription pricing drastically, as I was no longer a “legacy” subscriber. The price increase makes sense, given their multiple analysts doing quant work, a backtest engine, and more features. None of which I use.

They were nice enough to extend me for a couple months while they evaluate whether or not they can offer a more simplified version of the service per my needs. I pretty much only use Smart/Dumb money, seasonal patterns and Public Optimism/Pessimism. Long story short, I am not sure how long I’ll have access. It’s a solid resource for people who want commentary and analysis from others or who want historical studies/analogs. But that’s not for me because I do not like to get tangled up in other peoples’ opinions or interpretations.

NAAIM investment managers ended the year over-bullish, but not to the point of leveraged over-bullish (100%+), which can be a danger sign.

AAII (Ma & Pa front porch) ticked more bullish and per their history, are moderately over-bullish. It would be so nice to see big jerk INTO the market by these stubborn contrary indicators. That would be a “bull killer”, and as yet there’s no sign of it.

VIX is neutral in that such a depressed signal indicates a bullish stock market, but in not being a good timer, it also indicates a current condition for a market top.

VIX’s fellow indicator of complacency and greed, Junk bond spreads, is also burrowed south and contrary bearish.

Finally, market breadth by the MVSI had been rising since a late November low. As Santa ended on 12/6, that rise took a little hit. So sure, “fear” on the very short-term. MVSI may well have topped out, but it’s another indicator that will need follow-through in the coming days/weeks in order to confirm.

USD & Global Market

I have mismanaged my time, especially after squeezing in EZ’s request above. So let’s ramp ‘er up into the close.

USD not surprisingly put on a little rise while most markets faded the minute Santa left. The trend is still down from November’s double top. If the Gold/Silver ratio bottoms and turns up I’d expect either USD or JPY to also turn up if a GSR upturn brings a liquidity crisis. Possibly both of them, although the ‘Yen Carry unwind’ story is just theoretical at this point.

Alternatively, GSR could rise, USD could rise Yen Carry could remain intact and we could see a short phase of Tech out-performance as noted earlier in the report.

Okay, well this is interesting. The big relative up candle on the global ETF vs. SPY indicates that as of the first trading day of 2026 markets voted “America NOT great again” on a relative basis to its global neighbors. I have circled Friday’s candle along with a similar but opposite one that occurred on July 31. The previous candle failed to spark further downside. The current one with respect to further upside? TBD.

We are still managing the remnants of silly season and well, Trump just took over Venezuela yesterday. So, why don’t we see what the coming week holds and watch for follow-through or failure.

Portfolios

Gold is long-term risk management & monetary value/stability in a balanced portfolio.

I am removing the Taxable account from weekly reports because it is extra time consuming work (especially when adding notes to the right column), and it is not a representative “investment” account (it’s as much a cash/bond oriented savings account as an investment account).

Note that prominent positions still held, that do not appear in the IRA include TFPM, RIO.V (RIOFF), MP and AAPL.

The trading account is also removed for two reasons; I hardly ever use it, and if I do use it I want to speculate and gamble and do some crazy things that I don’t want others being influenced by. I may casually reference trading activity going forward, but a barely used trading account does not belong in this segment.

The IRA is the focus.

Roth IRA (non-taxable, no contributions)

The chart is okay. The chart will not be okay if it breaks the convergence of the green and black lines. That is all.

Cash is 45%. Short-term Treasury is 29%.

I wanted to start 2026 with my feet on the ground. Since I have no immediate plan to sell gold stocks (can change at any time), I bulked up on hedging (DUST & JDST) after chickening out and taking profits on silver short ZSL.

I would like to get rid of DUST and add more miners. Frankly, I would like to add a few more commodity and “bull” stocks as well. That would mean that January is looking positive. But I will not stand in the way of being wrong about that. Longer-term, “I see dead people”, to quote the movie. Dead people would be people who buy into any coming rally as a long-term situation.

The plan remains potentially (but not necessarily) bullish January > interim market liquidity problems > Fed/Gov to the rescue with inflationary policies > “inflation trades” later in 2026. Again, this is just my opening plan for 2026. It will likely be revised.

Cash & income-generating Treasury bonds are at levels that are right for me and my real-world situation. Your situation is different. Cash will be adjusted as needed.

Refer to the In-Week Notes under the NFTRH Premium menu at nftrh.com for market talk and occasional trading info, if interested. Also, you can follow on X @NFTRHgt for notice of updates.

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Notes From the Rabbit Hole (NFTRH) is a weekly market report in which we provide analysis on financial markets.  We make every effort to provide accurate and high quality content, but this analysis ultimately represents our opinions and these opinions are provided without warranty or guarantee of any kind.  See full terms & conditions of service under the ‘About’ heading in the main menu.