How I’m Approaching the Market in 2026

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Around the Market

Starting 2026 with discipline and perspective

And we’re back for 2026, with the S&P 500 (via SPY) essentially unchanged, down just $0.13 from last week as traders were out ringing in the new year. 2025 felt similar to the last couple of years, defined by heavy dip buying, especially after the April correction. But this is a new year, which means fresh P&Ls, and trade desks and portfolio managers will need to figure out how to navigate a market facing increasing geopolitical uncertainty and inflation that just won’t go away.

To start the year, I like to remind myself that when it comes to trading (and in life), these are my main focus areas:

• Focus on what I can control. Try to find the signal through the noise.

• Think in probabilities and expected value.

• The outcome isn’t always the correct measure of success. Build and adapt a rigorous process, and positive results will follow.

It’s been five years, and while I’m still relatively early in my trading journey, I’ve learned that each year brings new challenges that force quick thinking and constant adaptation. One of my main goals when I started writing here was to challenge myself with something new, as I was never much of a writer, while also sharing my thoughts on how we can build confidence and improve decision making.

Every year brings uncertainty in the markets, but one thing is for sure. I’m going to keep working on growing this community, and I can’t wait to see what 2026 brings.

Other key market moves this past week:

The Week Ahead

Economic Calendar

• ISM Services PMI (Wed 1/7 10:00a ET)

• Job Openings JOLTs (Wed 1/7 10:00a ET)

• Non Farm Payrolls & Unemployment Rate NFP (Fri 1/9 8:30a ET)

• Michigan Consumer Sentiment (Fri 1/9 10:00a ET)

• Consumer Price Index CPI (Tue 1/13 8:30a ET)

Notable Earnings

• JPMorgan Chase JPM (before open Tue 1/13)

Not an exhaustive list — just a few I’m watching closely for potential market impact.

On My Radar

Using volatility as a guide to expected ranges

Now that we’re at the start of a new year, I like to look at the expected ranges for major ETFs to see where the market thinks prices could land. To do this, I look at the options chain and volatility.

Volatility influences options pricing, and in a liquid ETF with strong options volume, these prices can be used to estimate an expected move for a given expiration date with roughly 68 percent certainty. Looking at the expected ranges for some of the most widely traded ETFs for the June 30 expiration, as of January 6:

• SPDR S&P 500 ETF Trust (SPY): ~$75 expected move, with a 68% probability of landing between $616 and $766

• Invesco QQQ Trust Series I (QQQ): ~$90 expected move, with a 68% probability of landing between $533 and $713

• iShares Russell 2000 ETF (IWM): ~$37 expected move, with a 68% probability of landing between $218 and $292

• iShares 20+ Year Treasury Bond ETF (TLT): ~$9 expected move, with a 68% probability of landing between $79 and $95

Volatility can be a useful predictor for expected moves, but nothing in trading is guaranteed. If you’re trading around these ranges, risk management still needs to come first.

I’ll check back in on these prices at the beginning of Q2 to see how these ranges are holding up.

What’s Top of Mind

Themes that could shape 2026

Now that the calendar has turned, you’re probably seeing predictions everywhere. We all have our own view of the market, so here’s mine. Below are my market predictions for 2026, with the usual caveat that this is not investment advice.

1. This one is a bold one, but I think we see at least one fed funds rate hike this year. Somewhat related, I expect the 10 year Treasury yield to move above 4.5%, currently around 4.15%, before eventually working its way closer to 3.5%. Inflation has come down meaningfully over the past few years, but it appears to have bottomed and is now trending higher based on the PCE price index, the Fed’s preferred inflation gauge, which sits at 2.8% using the most recent data from the Bureau of Economic Analysis. With GDP still running above 3% and federal government outlays higher in October 2025 than October 2020, it’s hard for me to see a strong appetite for rate cuts this year.

2. Another lower probability but potentially meaningful call is that gold futures trade near $5,500 per ounce within six months. Last year’s breakout appears to have been driven largely by global central bank buying, as countries diversify reserves away from US Treasuries. Whether this is driven by geopolitics or something else, the price action continues to trend higher, and I’m looking for ways to structure small risk, high reward trades around it.

3. Natural gas enters a cyclical bull market by the end of 2026. Over the past couple of years, there’s been no shortage of AI discussion. Is it a bubble or are we still in the early innings? Hard to say. What we do know is that data center construction is still accelerating. These facilities require enormous amounts of electricity, and today there simply isn’t enough supply. While I’m optimistic about nuclear energy in the long term, natural gas is the near term solution many companies are turning to, including installing gas turbines on site. Demand for the commodity looks poised to increase, which could support higher prices for several years.

A lot can change over the course of 365 days when it comes to inflation, geopolitics, employment, and capital spending. In three months, my views may look very different. But for now, this is how I see things playing out.

If you have a market view, I’d love to hear it. Click here to share your thoughts. Even if you disagree, I’m always interested in talking markets.

P.S. Want to see more of my trades? Subscribe to my YouTube channel.

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Hitting the Bid content is for informational and entertainment purposes only. The information contained is not, nor is it intended to be, trading or investment advice or a recommendation of any security, futures contract, digital asset or alike. I may hold a position in the trading vehicles discussed. Trading and investing contains risk. All investors should evaluate their own risk tolerance, financial situation, and investment duration before entering any trade or investment.