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[Edit] I wrote much of the report below before looking at any news (I tend to silo myself off to keep noise out of the analysis). After decades of Netanyahu imploring congress to attack the ‘imminent threat’ known as Iran, the “anti-war” president has finally gone and done it. We’ll probably get a market reaction on Monday, but we’ll need to keep in mind that inflammatory events – like war events – tend to have only fleeting effects on markets.

Personal Strategy

I would like to flesh out my personal strategy in the current market environment, after having made some comments about it, but not delving into it. It is definitely a market that needs to be interpreted in its internals (once again, you can get great internal views here at any time you’d like: Indicator Charts).

As the market rotates Software stocks down hard (AI being the excuse), Energy, Industrials, Materials and other Cyclicals up… along with rebounds in some critical mineral explorers, developers and producers… as silver rebounds, gold stabilizes and gold miners tick new highs… as Semi takes a breather… as these internal gyrations happen it is obvious that today a diversified set of holdings is in order. And that can very well include Treasury bonds (ref. Friday’s public article) in the interim.

Interim to what? With easing inflation expectations, the Trump administration and Fed are being provided cover to, you know, inflate. Print, liquefy, compromise the currency. Whatever they have to do to try to save the mid-term elections. We described this process at the hands of Biden/Harris all through 2024’s run up to the ultimately failed presidential election and it is happening now as well.

I still have questions about the possibility of a larger market correction prior to a bullish 2026. But there are pros and cons to that view.

Pros (to a correction):

• VIX divergence such as the one in place now most often brings a correction, eventually. Ref. chart below.
• The look of some index charts, notably SPX and NDX, which appear to be rolling over w/ negative RSI divergence.
• Bellwether Nvidia beat on earnings, rose, reversed and got hammered. Not a good signal at all.
• If that impairs the Semi sector, the market will see its leader abdicating. It could simply continue rotating elsewhere, or it could signal a significant top.
• The seasonal average gets choppy in mid-February. If this does turn into a correction the highs that will have preceded it for SPX and NDX were on January 28th.

Neutral (to a correction):

• Broad sentiment has backed off further, now in Fear/Neutral territory. If it is a correction, sentiment has room to back much further.
• AAII have backed off from an extreme bullish reading of 50% bulls in January to 33% bulls today.
• NAAIM have taken a hit to 75% bullish from a high of 98% bullish in January.
• Junk bond spreads have risen in risk-off fashion since January’s extreme lows, but do not yet indicate any sort of panic.

Cons (to a correction):

• Market breadth is strong.
• The very fact that this is a contentious election year and the liquidity spigots are already in place.
• The above-noted tendency for the market to sometimes rotate rather than take a widespread correction. It could simply rotate its way into the anticipated liquidity orgy.

The Biggest Potential Con

You may recall in 2024 I felt that the piles of stimulative excess the Biden admin was layering into the into the economy and markets would unwind into a big pile of dung in Trump’s lap, probably just after inauguration. Well, a reaction began in February, 2025, and bit hard into the April low. It was a pretty heavy market correction, but not a bear market by any means. That maybe have been THE reaction to clear the pipes for the next 1-2 years.

While I don’t use charts as a be-all, end-all indication, you know I stare at them quite a bit. If this chart of the VIX divergence did not exist in its current form (indicating bearish) I would not pay much attention. But it does, and I am. That is due to the overwhelming number of times such signals (including previous to the Feb-April, 2025 correction) as the current one have eventually resulted in a market roll-over. Hence, I held my SPXS (SPX short) position and added SOXS (SOX short) to boot.

Groups of Holdings

With so many mixed signals (e.g. bullish GDX/HUI and TSX-V vs. suspect SPX and NDX) I think it is best to be diversified for market rotations into a wider areas than the usual bloated suspects (Mag7 type stuff). That was not so much the case in 2025, but this year so far it is. In this way, you can catch internal market rotations by default.

Primary Longer-term Group

This represents the leadership from 2025, which appears to be setting up to also participate well in 2026, although perhaps not lead to the degree of 2025. This assumes my view of a more extended correction was wrong. I have had mixed signals here as with the broad market noted above.

With the way last week ended, it will have to be quite a head fake and whipsaw for the sector to fail back into correction now. We knew that a bounce was likely due to an anticipated solid earnings season. Now, with earnings season fading the gold stock sector needs follow-through to keep the rally going (duh).

• Gold is a very long-term investment. Personally, we’re now talking decades. This is an investment in safety, insurance and something stable within a global macro that is trying to sort itself out to its new – and often painful – realities.
• Gold Stocks (miners, exploration and royalty) are not as long-term a hold as gold, but in this new macro and in the ongoing bull market, I expect to hold at least a core (with hedging as needed). Under the title “gold stocks” I include silver and hybrid gold/silver stocks.
• Gold stocks were never an “investment” in the old macro. Now, they can be long-term holds at least (ref. HUI/Gold ratio below).
• Currently held items include miners AEM, B, EQX, NGD/CDE/SILV combo, HL, DVS.
• Royalties TFPM, ELE, VOXR, OGN.V and GROY.
• As you know, I firmly believe (well, in my mind I know) we are in a new macro world. Just look around. And it’s not all Trump’s doing. He’s a hammer, IMO. A monstrous cartoon come right outta da TeeVee and into our living rooms! But Trump or no Trump, the world is changing. I think Trump is a tool to that end. That’s all.
• Financially, debt is nose-bleed, inflation is going to rage again and though most who grew up in the old system (like your letter writer) don’t see it and will not want to see it, it’s a new era with new investing rules. Probably the first rule is to be your own little Central Bank with gold’s insurance. Another rule is that the trends of the old era are due to break. Like, for example, the long-bearish HUI/Gold ratio:

Firmly trending up for over a year.

And now ticking above the 2020 high as it attempts to break its base. The final objective to a big time future is to take out the 2016 high.

Things are extended and subject to correction any time but the safest bet, as proven recently, is per Old Turkey: “It’s a bull market, you know.”

So as to Strategy, my current stance is to not try to guess about corrections. I’ll be aware of them, hedge here or there, and try to shield within the broader market’s internal rotations (as you can see below, I am positioned in much more than gold stocks). Last year they were clear leaders. This year they are a part of a portfolio. An important part.

Exploration Lottery Ticket Group

Much like silver, the TSX-V index took a good downside clean-out to clear support. It’s ratio to the TSX did so as well. The exploration stocks, many residing in the TSX-V index, are often multi-metallic, including gold and silver. There is nickel, rare earths, copper and platinum/palladium being dug for by these little fellers.

I am lucky enough to have two geologists who are also principals in exploration properties who I trust and have gotten good advice from. If I ever get off my butt, put in some effort and figure out a good podcast format, I intend to converse with and/or interview both gentlemen. FWIW, the stocks they are personally intimate with either through affiliation or positive fundamental views for, are my currently held TLO.TO, MMG.V, PGE.V, AE.V and BTT.V.

One geo, Michael (BTT, TLO & AE), some may recall, guided me/us quite well with Great Bear Resources, long-since bought by Kinross. We first became aware of GBR after a former gold stock fund manger pounded the table. When Michael also banged on the table it felt no-brainer(ish) to me.

The other, Greg (MMG.V & PGE.V), has dispensed the main piece of advice I value now. To seek out exploration situations with interest from large miners whenever possible.

To that I add my always-intact concern about political turmoil (now, more than ever, and that’s not even talking about what’s going on with Vizsla Silver in Mexico). Aye aye aye. Whenever possible I’d prefer to default to keep not only my exploration holdings, but also my miner holdings in the US or Canada. There will be exceptions, but that’s the rule.

The bottom line of this stuff is that the word is in disarray. The point is that the long forsaken mineral exploration sector could experience a huge bull market and one day, a bubble if/when the global asset grab really throttles ahead. I want to keep an eye out for more opportunities in these hole diggers.

Not shown above are past and current holdings DVS and its partial silver exploration/partial gold mining, DC and its favorable South Dakota locale, IDR and its small gold mine and large REE land package, copper digger ARA.TO, REE developer ALDE.V, and PGM digger AIR.V (also pinged by Michael as a spec idea).

Technically, da ‘V’ could have a long way to go out of this bottoming/base when you consider that the stuff (Au, Ag, Ni, REE, Cu, PGM, u3o8, energy commodities, etc.) that they are exploring for is increasingly valued, world-wide. I intend to continue taking in the geos’ expert guidance, other quality analytical guidance, and my own charts and big picture macro perspective to navigate going forward.

Uranium

I added the u3o8 holder, SRUUF and UEC. Then UUUU, which is also a play on REE. I thought the U sector was ready to go and it still may be. So I’ll hold pending further incoming info. Uranium is after all a strategic energy fuel in a contentious world and likely a part of the AI data center build-out.

Other Commodities

Take your pick here. If the super-cycle really is upon us (much better shot now in a more permissive macro than at any time in the previous 4 decades) you can look at producers of energy commodities, Cu/Ni/Pd/Pt and other metals. This is the area I want to be watching for additional positioning.

I’ve got some copper exploration exposure, PGM, nickel, and in energy, aside from uranium, I’ve got EQT for Gas, having forgotten to add AR on Friday after I looked at it. I sold out the XLE positions, which I felt had a good run. Really, there is a world of companies exploring for, manufacturing, digging up and transporting commodities. It is likely a key area in the new macro.

Defensive (mostly H/C related) Group

I guess I could have run out and bought Consumer Staples, Telco and some other defensives. But the Healthcare/BioPharma sector is what I see best and have parked defensive funds in. Additionally, the Medical Device sector is another always on my radar. That one is not really defensive as its valuations generally are not “value”. But they are economically shielded to a large degree.

BioPharma holdings are the long-held GILD (acting like a bull stock rather than a defensive stock), REGN (bought back), BMRN (bottom feed) and in Medical Device, long-held MDT, STE, the bottom fed BSX and last week, WAT, fresh off its merger with the Bio-sciences division of BD.

If the markets and/or economy get gunned in 2026 this stuff should under-perform. But that’s what it’s here for… ballast, balance. It’s part of constructing a portfolio that I don’t have to babysit every minute of every day.

Bull Stonks Group

With the wavering, toppy look of SPX and NDX, it is bull stocks that have been performing poorly. I added the likes of MSFT, META and others in anticipation of a potential liquidity run into the elections.

I added bombed out software stonks like ZS and PATH, held and increased ZM into earnings, only to get hammered, and hold various other items like CSCO, RDDT, ANET, NOW and PATH. This has not proved to be a smart thing to do so far. Also held are AI focused Semis MRVL, AVGO and ALAB. So far, bupkis.

I am watching both the NDX and SOX for signs of breakdown. If they breakdown, my bull stocks will probably break down or under-perform.

Against that prospect I hold a couple leveraged index shorts (SPXS and SOXS).

I have been expecting stocks like NOW, ZS, PATH, SNOW and ZM to recover from AI-mageddon because I think a lot of it is hype. Many of these stocks should be aided by AI, not impaired by it. But you know the market, it’s going to do what it will do, sometimes interminably, until it finally catches on. I will not ride this view forever. I’ve already taken deeper losses than I’d like on some items.

Rotations (Materials)

As noted in an NFTRH+ update, Materials is one of the sectors that got the rotation bid. The sector as a whole is too elevated to buy, personally. But in that update we noted CBT, which had a prospective chart for a trend change from down to up. I’m still holding it. It’s items like that I would like to patiently consider along the way of 2026.

“Materials” includes chemicals (part of CBT’s business) and Potash guy IPI is in that realm. I have an eye on MOS as well. Especially after it got hammered on earnings. Of course, MP “Materials” is another, as would be other REE stocks like LYSDY and the above-noted IDR and ARA.TO, all currently held.

Rotations (odds & ends)

Pot stock CRON is held. Canada’s TLRY and US MSOs, GTBIF, CRLBF and TCNNF are on watch.

Bitcoin dividend payers BTCI and/or BITO are on watch.

Short Positions

I have done exactly nothing in my small trading account after making excellent profits on SLV puts on silver crash day. But I want to start looking at short positions. NFTRH+ idea PLTR has still not bounced to a setup point where I’d consider shorting it.

I was also considering the banks and financials last week in an interim declining interest rate environment. If KBE or XLF get any sort of bounces I’ll consider it.

Global

It pains me to this day to see ASML flying around up there without me. Perhaps if an Nvidia-instigated Semiconductor correction gets bad enough I’ll have another shot at it. ASML, above most Semi Equipment companies, has a well-fortified moat around its global business.

With the balance of the world still out-performing the US (as it attempts to continue degrading its currency) I want to increase global exposure in the name of diversity.

I welcome suggestions from global citizens, as my main holdings are centered in the US (and Canada), as those are the areas I see best.

BABA was a successful trade and is on watch as it has corrected back to the uptrending 200 day moving average. But it’s a much bigger world than ASML and BABA. I want to look into that world in 2026.

I’ve got my eye on the Yen (FXY), which could act as both a profit-maker and risk manager. Risk being that Yen carry trades unwind.

Treasury Bonds

Speaking of risk management…

Look, we all know the US, along with many developed world nations, are hopelessly drowning in debt. And yet it does not matter until it matters (like after the current disinflation phase ends and the new inflation phase begins). In the interim, short-term Treasury bonds have supplied risk manage and income at the same time. I expect them to continue doing that.

Currently held are direct short-term Treasury bonds, SHY and STIP. For more speculation on the disinflation I added IEI and IEF. Cash is in Treasury money markets rather than commercial money markets. I gladly sacrifice a bit of income to a bit more safety.

Bottom Line

In the report above I’ve tried to illustrate where I’m at regarding portfolio strategy. Incoming events will very likely alter the views to some degree. But as I did last year, I am going to be Mr. Week-to-Week. Open to change and avoiding rigidity and dogmatic views. Today the view is diversity in a complex world in motion.

Portfolios

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

As always, risk will be managed aggressively if/as needed.

Taxable “Savings” Account

Savings account continued upping its equity holdings. It is following the diversification plan illustrated in the report above. Risk management is in the form of cash, short-term Treasury bonds, two longer-term Treasury funds (n the 3-10 year range) and a couple leveraged index short positions (SPXS and SOXS). In order of position size.

The taxable account carries high cash levels as long as cash and equivalents are paying out. This is considered a savings account of sorts, rather than a speculation or even investment vehicle. The goal is to speculate around the periphery. In another market phase (e.g. post-correction/bear/crash), the account may get more in the game.

Roth IRA (non-taxable, no contributions)

The chart is trying to prove my often asserted view that lateral support is more important than trend lines (an overrated aspect of TA, IMO). Steady as she goes, I guess.

Cash is around 27.5%, short-term Treasury bonds are 39% and equity involvement (including two leveraged short positions) is about 33.5%. As per the current theme, the account is seeking to be fairly diversified. The short funds are 3X, so effectively triple the size shown.

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.