January 12, 2026

(GEOPOLITICAL RISK TAKES CENTRE STAGE – WHAT DOES AMERICA DO NEXT WITH IRAN AND VENEZUELA?)

January 12, 2026

Hello everyone

WEEK AHEAD CALENDAR

Monday, January 12

Tuesday, January 13

8:30 a.m. Consumer Price Index (December)

8:30 a.m. Real Earnings (December)

10:00 a.m. New Residential Sales (September, October)

Earnings: JPMorgan Chase, Delta Air Lines, The Bank of New York Mellon

Wednesday, January 14

8:30 a.m. Producer Price Index (December)

8:30 a.m. Retail Sales (November)

10:00 a.m. Manufacturing and Trade: Inventories and Sales (October)

Earnings: Citigroup, Wells Fargo, Bank of America

Thursday, January 15

8:30 a.m. U.S. Import and Export Price Index (November)

Earnings: J.B. Hunt Transport Services, Morgan Stanley, Goldman Sachs Group, BlackRock

Friday, January 16

Earnings: State Street, PNC Financial Services Group, Regions Financial, M&T Bank

Freedom is on the move

The massive pro-freedom and anti-regime protests in Iran show a country that is on the brink of huge change.

Since 1979, when Shi’ite clerics took over the country, Iran has been a mess both for its own people and the world, crushing its citizenry and sponsoring terror organisations like Hezbollah that spread death and destruction around the Middle East and beyond.

With an internet blackout, accurate information is being stymied. Nevertheless, with the limited news reports we have seen, it has become evident that dangerous and deadly measures are being used against protestors to quash the uprising.

President Trump is weighing up a response from the U.S. in the wake of the massive unrest in Iran. The range of tools includes drones, missile strikes from air and sea to cyber, and sabotage.

We wait and observe.

Australia – a nation of extremes

In Australia, terrible weather conditions are hounding the nation. In Victoria, fires have destroyed around 400,000 hectares of land, and hundreds of homes have been burnt to the ground. Around 26 fires are still burning in Victoria. One man lost his life as he tried to protect his home. Many people were uninsured and have now lost everything.

In northern Queensland, a category 2 cyclone has been pounding the coastline near Townsville and Ayre. A second low-pressure system near Vanuatu is being closely watched as it gathers speed and intensity over the Pacific Ocean.

This category 2 cyclone has now dumped inches of rain on western Queensland, an already flooded area, from a major deluge between Christmas and New Year. Farmers have lost thousands of cattle, their livelihoods, and their homes. Apparently, you can see the vast expanse of the floods from space.

Australia is a beautiful country, but it is a land of extremes, which can be challenging and cruel. The Australian spirit is tested during these events, but we must be resilient to withstand these ever-present extremes.

The Markets – what’s in store this week

Earnings season is upon us once again.

First off, the major banks, like JPMorgan Chase, Wells Fargo, Citigroup, and other regional banks.

The broadening we have seen in the markets recently could be further enforced as earnings season plays out.

Inflation data is also out this week, as well as producer prices and retail sales. Fed funds futures are still pricing in two quarter-point cuts in 2026, starting in June, according to the CME FedWatchTool.

STOCKS

I recommended Caterpillar (CAT) last year on August 20, when it was priced at $416.09. I still really like the stock going forward as the technicals still present a bullish story. The stock is heading to a Wave v) target at around $780. To keep this view valid, the price must remain above $572. Both the MACD and RSI show a pattern that usually confirms the continuation of the bullish trend. The 20- and 50-day moving averages are supportive of this bullish trend. The weekly chart shows the 20-day MA (blue)crossing the 50-day MA (red) around September last year

Weekly chart (CAT) $617.62

Daily chart (CAT)

OPTIONS TRADE FOR (CAT)

Here is an options trade to take advantage of this setup.

Buy the (CAT) 620/630 out-of-the-money bull call spread at $4.52 or best. (Keep in mind prices are changing all the time).

Max Profit = $548

Max Loss = $452

Cost = $4.52

Expiration: Feb. 20, 2026

Details:

Buy 1 (CAT) 620 calls

Sell 1 (CAT) 630 calls

I have given prices just for one contract.

Keep in mind the (CAT) price must remain above 572 for this view to remain valid. Please use good risk management.

If you don’t do options, you can always buy the stock with a tight stop.

MARKET UPDATE

S&P500

The index had a positive week last week, and this bodes well for the year, although there will be volatility during the year, which will shake some leaves from the trees. The index is now testing the ceiling of the rising wedge/trend line. There is no confirmation to suggest we are at the end of this move in the index; however, I would exercise strong risk management as we push into new territory, particularly with the backdrop of geopolitical tensions and Trump’s fractious relationship with Fed Chair Powell.

Resistance: 6975/85

Support: 6920/30

GOLD

Gold has surged again this morning. There are no signs yet that a top has formed, so further gains are possible. The same applies to Silver. As always, exercise strong risk management.

Resistance: $4585/90

Support: $4410/20 and $4260

BITCOIN

Since late last year, Bitcoin has been in a period of ranging behaviour. I expect this pattern to continue until we see a rollover and a move towards 80k. There is a possibility that we could see rallies to the 90/95 area, but at the present time, I would see them as a time to sell.

Resistance: 94k-96k

Support: 88.50-89k and 84k area

HISTORY CORNER

On January 12