Summary
Highlights
The week is expected to be volatile due to news from Venezuela, upcoming unemployment data, and a Fed meeting. While the Venezuelan situation might not heavily impact the stock market, it could significantly affect commodity markets, especially oil and gold. The unemployment rate, currently at 4.6%, will be a key factor influencing the Fed's decision regarding interest rate cuts.
Venezuela possesses the world's largest proven oil reserves, alongside significant gold, natural gas, and other resources. The US intervention could lead to increased oil supply, but OPEC countries might retaliate by limiting their production, potentially causing short-term oil price volatility. This could create opportunities to play the counter for oil prices and some smaller US oil companies like Occidental Petroleum and Devon Energy. Gold, however, saw a sharp decline, presenting a potential short setup.
Important unemployment data, including ADP non-farm employment change, Jolts job openings, unemployment claims, and the non-farm employment change, are scheduled for this week. If the unemployment rate comes in higher than expected, the Fed might be compelled to cut rates more aggressively at their January 28th meeting.
The speaker anticipates a significant retracement in the S&P 500 early in 2026, potentially hitting the 6,100 level, followed by a rally to 7,500-7,600 by year-end, resulting in a 10-12% gain. Historical data from previous presidential terms and an unusual put-call ratio at the end of 2025 support a somewhat bullish Q1, with a potential 10-15% correction after Q1.
The video highlights several short-term trade opportunities. Bitcoin holding its 2022 trendline suggests potential breakouts for crypto-related stocks like Iris, Cipher Mining, Nebius, and Coreweave. Robinhood is also coiling in a pennant formation, indicating a potential breakout if it stays above its trendline. Google remains a strong trend play, with the advice to exploit the trend until it breaks. Nvidia's failed head and shoulders pattern at all-time highs is seen as a bullish signal, similar to its 2023 performance.
For long-term investors, Netflix is considered a buy, especially if it dips to previous all-time highs. Meta and Microsoft are also viewed as obvious buys, particularly if Microsoft reaches the low $400s. Costco is attractive if it drops below $800. NVO (Novo) has completed its full sell model and broken a short-term trend, making it a long-term buy. Uber is also presented as a great long-term buy due to its cash-generating capabilities and strong trendline.
The speaker emphasizes the importance of having a clear setup with defined stops and exits for every short-term trade. For long-term investments, the strategy is buy and hold with a focus on value. The video concludes by encouraging viewers to engage in discussion about market impacts, personal investment strategies, and their outlook for the year.