Daily Newsletter 2/2/26
The market’s speculative euphoria finally cracked on Friday. Overinflated tech and growth stocks plunged sharply, while the oversold Dollar surged, hammering precious metals and exposing how fragile that mini-bubble had become. The turn wasn’t unexpected—by every metric, those bubbles were overdue for a correction.
The return of Kevin Warsh to the conversation adds another layer. Once known for his hawkish instincts, Warsh must have convinced Trump that his outlook has evolved. Still, we expect him to be more conviction-driven than data-dependent, a trait shaped by his long experience in markets. Unlike Powell, Warsh might focus less on consensus and more on firm judgment—especially in decisions like how quickly to unwind the Fed’s balance sheet or how to handle regulatory responsibilities within the system.
As for gold’s strength, it reflects something deeper than speculation. With debt levels soaring across major economies, investors increasingly treat gold as the only credible alternative to fiat currencies. China’s speculative flows likely amplified the moves in silver, the traditional high-beta companion to gold.
Warsh, though just one individual, could modestly slow the Dollar’s decline—but he can’t reverse it outright. What he can do is restore a measure of independence to the Fed. He’s seasoned enough to resist political pressure, possibly more so than Powell, and his rapport with market veterans like Bessent could give the institution a stronger standing.
Interestingly, Warsh favors leaner communication with markets—a sharp contrast to Powell’s early missteps and eventual improvement in transparency. Whether tighter lips will lead to steadier policy or simply more confusion remains an open question.
And here is our view on precious metals (our focus is on gold, silver, and copper): we remain medium- to long-term bullish on gold and silver, and fully bullish on copper. Although prices were inflated prior to the recent pullback, we view this as a healthy correction within an ongoing uptrend. We recognize that silver, in particular, has historically struggled to recover from sharp declines, yet our outlook remains constructive. We see current levels as a buying opportunity and have increased our short-term exposure to gold and silver. Our current positioning includes several low- to medium-delta option trades expiring in late February and early March. We believe commodity prices will recover once markets adjust to the appointment of the new Fed Chair.
Of course, if institutional capital reallocates away from gold and silver into alternative havens such as the Swiss franc or cryptocurrencies, our assessment could prove entirely incorrect.
We are aware that central bank gold purchases may be showing signs of slowing; however, we believe the decisive factor will be continued unreported Chinese buying, which we expect will offset this loss of demand.
OUR TRADES
We share all our short-term trades in the Tactical Portfolio exclusively with paid subscribers, showing the exact entry time and price for every trade below. Subscribers receive timely buy and sell alerts via chat. Our approach is eclectic, blending macroeconomic insights with a quantitative methodology. We do not limit ourselves to specific markets or sectors, seeking to profit from any short or very short trade that fits our strategy. We use sophisticated option strategies to capitalize on short-term market movements, ensuring full transparency and prompt exit updates.
Our option positions are presented using a single‑contract example. In practice, our portfolio includes positions with varying contract sizes. This approach allows you to scale position size up or down to reflect the strength of your market view.