Market Awareness in 2026: Bitcoin, Metals Volatility, Policy Risk & Trading Outlook

Forming a Market Opinion in Real Time

Last week's price action was relatively subdued in equites, a stark contrast to what's taking place in metals. The S&P 500 gained 1% while silver gained 12% for the week (and is already up 8% in the premarket). Gold added nearly 4% for the week and it too is up in premarket by nearly 3%. Oil also closed higher by 3% last week after news emerged that oil executives were less than enthused about setting up shop in Venezuela. At the same time, continued unrest in Iran added to oil volatility.

As a short-term trader, I'm paying particularly close attention to ranges, volatility, and how assets are trading relative to one another. You may hear us talk about "market awareness" on the network and for me, that is a large part of my awareness. I'm also paying attention to assets such as bitcoin, which, in my opinion, have served as a great measure of risk appetite. To that point, one thing that has stood out to me is since the beginning of the year. Bitcoin futures (unless I state otherwise, you can assume I'm always referring to futures) have closed above $90K each day this year. My read on that is we may be seeing a return of some risk appetite. A close above $95K and then holding that level would firm my belief.

Another part of my market awareness comes from news. I don't care what your political leanings are; we are seeing some policy developments taking place that I find concerning. In the last week, the president has instructed Fannie Mae and Freddie Max to purchased $200B in mortgages in hopes of driving mortgage rates lower. He has also said he will bar investment companies from purchasing residential properties with the goal being to reduce demand and thereby reduce prices. President Trump also said he plans to cap interest rates credit card companies can charge at 10%, for a period of time. Finally, we learned over the weekend; the DOJ is pursuing an investigation in Fed Chair Jerome Powell, which likely has more to do with the president's dislike for Powell and his desire to see the Fed lower interest rates. This all comes against a backdrop of U.S. intervention in Venezuela and the impact that could have on lowering oil prices, along with continued heated rhetoric about the president's desire to "acquire" Greenland. That is a lot to digest and I'm going to try explaining how it factors into my trading.

I like the idea of lower mortgage rates, lower housing prices, and lower interest rates on credit cards. There is no debating a large swath of the country has been economically left behind, and lowering costs would help them. However, I'm also a capitalist and government intervention, and what has been coined as "marketcraft" by author Steve Vogel (think of statecraft and policies intended to elicit certain outcomes) makes me leery. These policies are effectively price controls and as we have seen in the past, most recently the 1970s under the Nixon Administration, those policies may yield short-term positive results, but longer-term they are less successful. I'm also very concerned when the Chairman of the Federal Reserve is being investigated by the DOJ when it's quite clear the basis of the investigation is the president's desire to control interest rates. One can make an argument interest rates could be controlled by the president, but that is not how we have done it and I don't personally subscribe to that belief.

Having said all that, I'm heading into the week with a bullish bearish for equities. I think the action in bitcoin is a positive development. Volatility, as measured by the VIX, has stayed right around its historical mean and other measures, such as SKEW, haven't shown too much concern for any sort of outsized move in the near future. I'll note that is a shift from how I had been trading equities when bitcoin couldn't seem to close above $90K.

I believe bonds are likely rangebound for the time being. I mainly trade /ZB and that has remained in a range of 115 - 116 and change (in fact, I just bought some /ZB this morning at 115'08 and closed at 115'16). I'm more inclined to buy bonds on a pullback than I am to sell them at the higher end of that range. Why? I wish I could tell you. It's just a personal preference. Based on the CME Fed Watch Tool, there is little reason to expect much in terms of rate cuts anytime soon. Therefore, it seems likely bonds will trade in a range.

Oil is one asset I'm trading from the short side. I think it's pretty clear at this point the administration views low oil prices as core to their economic goals and President Trump has said on numerous occasions he would like to see oil around $55. So, I'm getting short oil anytime it reaches around $59.

As for silver and gold.... I have as much of a chance cracking the whole "walking" nut as I do understanding what is happening here. What I do know, however, is what a bubble looks like. Sure, you can make solid arguments for why these commodities are moving higher. Then again, Pets.com had a hell of a story for why it became a public company in the late 1990s. Assets are not meant to move at these types of velocities. It's unsustainable, unsettling and ultimately, when it ends, it tends to be as ugly as the first three quarters of a Bears game. I've largely backed away from trading either of these and I am being very selective (and usually some combination of overly confident and overly tired) as well as extremely small if/when I do take a position.

Lastly, it is the beginning of earnings season and that is something I pay attention to. I'm not a big fan of trading earnings, but I will listen to company outlooks. Yes, I am aware it's a bit a of shell game, but at the same time, I'm a sponge when it comes to absorbing as much information as I can when forming my market opinion.

I lied, this is the actual lastly. Green Bay sucks!

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