Epiphany

I have been alerted that today is Epiphany thanks to my Google calendar and its incessant nagging. That's what I get for clicking the 'holiday' setting, but it helps me avoid confusion since every day is a holiday when you're retired. The original 'Epiphany', 2000 years ago, marked the realization of something that had seemed implausible but later became apparent. Do I have any epiphanies for the year ahead?

I list a few below in no particular order, and they are subject to debate. They are a mix of predictions and realizations from recent events. Forecasts are for fools, but since I fit the bill, humour me, OK?

Samsung is a better phone/stock than Apple.

Foreign stocks, including Canada, will outperform U.S. equity markets.

Copper is a better hard asset than Bitcoin or Gold.

The Fed is done, but long rates will rise.

NVDA won't beat the market - FCX will.

The Canadian dollar is headed to 85 cents.

Trump will soon be a lame duck. Et tu, Rubio?

The Leafs aren't gonna win the Cup.

Ok, sorry diehard fans, that last one is a lay-up, but I had to put it in to improve my odds. I'm sure there are more that I could come up with, but I think that is enough rope to hang myself a few times over. The business of predicting the future is fraught with risk. But isn't risk what we all crave? I mean, without it, there is no return, and riskless return isn't fun - ask any bond trader.

Markets are shaking off the holiday somnolence with a zeal typical of the new year. A suddenly energized investor base seems to have parked its Trump Derangement Syndrome excuse and come out swinging. As we are seeing today, even an extrajudicial kidnapping has little effect unless it is accompanied by higher interest rates or a slowing of AI hype. We, once again, are learning that money has no soul.

This is a bull market, so don't confuse it with rational behaviour. Anticipations may change abruptly, so don't get fixated on what drove markets to these lofty heights. Anticipating those anticipations will get even harder as we go. I do not doubt that some of my predictions will be wrong, so let's take the bull market as it comes and enjoy it while it lasts.

Just let me know when that is. You'll need an epiphany for that.

Risk Model: 3/5 - Risk On

A bullish sentiment recovery has been in place since the April '25 low. Even Boomers, the majority of the AAII membership, are getting optimistic. They have more cash than Millennials now that Bitcoin has cooled off. Self-reinforcing overconfidence has been a missing element in creating the final phase of this bull market. We may get that in '26.

AAII Bull/Bear

Copper vs Gold has moved above the signal line and has formed a base that looks to be resolving to the upside today. U.S. speculative activity is still pushing the narrative in the short term, but the longer-term fundamentals certainly favour a seasonal blow-off into Q2. Every bull market has a copper top.

Copper/Gold

Implied volatility of listed options has collapsed, indicative of pervasive complacency. Insurance is only cheap when nobody thinks they need it. Just ask Floridians who live near the ocean.

3 Month Volatility

Price variables, RSI, and the 200 DMA are overbought. This is the hallmark of a strong bull market, but troubling to those in the bear/correction camp. As we saw in November, a rising volume confirmation (CMF Index) would be welcome here! Many left-behind November dip-buyers are still lurking after the low-volume Santa rally caught them napping.

TSX ETF - XIU