I was going to write a new 3 tips for day trading options article (part deux) but with the Iran/US war dominating headlines, media coverage and in the minds of traders, I felt it best to cover various trade ideas and tactics due to what is front and center.

I’d like to start off with some key data points, talking about where capital is flowing (and where its not), then explore the decision tree you want to be thinking about, and what tickers you need to be watching.

Let’s dive in.

Key Data Points for the Iran/US War

The Iran/US war started on Feb 28^th with the first day the markets could react being Mar 1^st which was Asia, then the EU, then the US markets. As you can see from the chart below, the 20 yr US government bond yields have risen sharply from 4.54% to 4.85 as of this writing.

This is important because as long as there’s volatility in bonds, there will be volatility in equities. The same holds true for WTI (West Texas Crude) chart below.

What holds true for bonds (volatility in bonds = volatility in equities) also holds true for…equities. As long as we have volatility in the price of crude, we’ll have volatility in the markets.

NOTE: If there was ever an argument to shift away from fossil fuels, this war is providing a definitive reason why.

The problem with oil prices being volatile is that the Strait of Hormuz (which is only ~10 miles wide, and Iran controls half of it), is a choke point that Iran is going to fully leverage. In fact, one could say, its one of their primary military goals in this conflict – control the Strait of Hormuz to keep the pressure on the US/GCC to get them to back down. And it is something they can control easily, with small/fast boats, jet ski’s with guns on them, mines, and drones. No amount of air attack will eliminate the threat Iran poses here.

Thus, traders should be expecting volatility in oil as long as this conflict remains. Considering 20% of the global supply of oil goes through this Strait of Hormuz, it will be a massive lynchpin in this war.

Hence, whether you like it or not, we’re all oil traders now. The good thing is Trump definitely Taco’d when WTI spiked to $112 a barrel.

Trading tactic: Watch $WTI, $USO and LNG (via $BOIL) each day to get clues how the market is moving on the day. $85 WTI is ‘digestible’ but ‘challenging for a global economy still dependent upon crude. $112+ is not and $150 becomes incredibly painful to where it could bring the global economy to a halt. The higher WTI goes, the more leverage Iran has over the US.

FYI, Asia imports most of its oil, along with the EU, particularly from the ME (Middle East) so right now the EU and Asia are hurting economically from this.

The last key data point I’d like to mention is $VIX (volatility index for the S&P 500).

$VIX 5 minute chart

Decision Tree + Trading Tactics for the Iran/US War

Remember how I said we’re all oil traders now? There’s a second part to this. That we’re all day traders now (or medium/long term swing traders) as the US administration is giving mixed signals (at best) as to what this war is about and what the goals are.

Is it regime change?

To stop a nuclear Iran?

To destroy their ballistic missiles?

Is it going to last a few days (initial assessment)?

3-4 weeks?

Or a ‘forever’ war?

The communication out of the WH (White House) has been all over the map, Trump even said (ahem…Taco’d) on Monday “I think the Iran war is pretty much over…” This shows Trump is carefully watching the markets, and if anything can make him Taco, it’s the markets.

With no regime change in place, will Trump declare victory? I think a rat on meth might be more predictable than Trump’s mind on this war, but the bottom line is Trump can swing the markets in either direction with a tweet. Considering how changing his mind seems to be a regular thing, we suggest avoiding short term swing trades (days to a few weeks).

Holding short term swing trades overnight is hazardous at its worst, and foolish at best. We suggest tactically day trading for now (to avoid overnight risk) or setting up medium to long term swing trades (May/Jun+ expiries) to ‘smooth’ over the current indecision/fog on this war.

In terms of the decision tree, here are several points to consider below (in no particular order):

• If WTI stays around $85 a barrel, it will be a mild/medium amount of political pressure on Trump, but not enough to force his hand
• If WTI jumps to $112-150 a barrel, the economic + political pressure will be immense and VIX will find its way back to ~$30
• At $200 WTI (extreme scenario), we have a potential lockup of the global economy (similar to COVID 2020 levels)
• Under the last two scenarios above, we like being long $USO or $BOIL via end of MAR or end of APR bull call spreads
• Also under the last two scenarios, Trump either has to de-escalate (with VIX going down) or escalate via a ground invasion (VIX well north of $30). In this scenario, we like being LONG iron condors on VIX
• We’d like to note if Trump puts a decent amount of boots on the ground, the US will lose the war (as it becomes a guerilla war inside Iran), and Trump/Republicans will get killed in the midterms. Bonds will also likely spike (~5% for 20 yr yields). For this, we like trading $TLT (20yr bond ETF) via bear put spreads
• If Iran is resilient enough to withstand boots on the ground, Trump is then faced with the same decision tree (de-escalate and take the L/loss, or escalate) but Iran might want to continue the war till midterms to absolutely punish Trump politically. This would tactically be very smart for them and likely destroy any political capital he has left
• If, however, Trump calls an end to the war in the next few weeks (‘we won this war’) then we think VIX drops to $20 in a jiffy, equities rally for a move up to $700 in $SPY, and bonds/oil comes down. For $SPY, we like end of APR bull call spreads or bear put spreads for VIX
• If somehow this escalated to tactical nukes (what we think is <5% odds) then we have bigger problems to worry about (like WWIII). In this scenario VIX would likely spike to $40-50+ levels, bonds well past 5% and WTI well north of $150. Let’s pray this doesn’t happen

In Closing

We hope we get a de-escalation + end to this war soon. But as traders and investors, we have to manage risk first (especially in this environment) and adjust based on what the market is reacting to (geo-politics for the time being). Hopefully we’ve given you a good decision tree to follow, along with what tickers to focus on, what we suggest doing tactically, and how to trade the Iran-US war for the time being.

If you’d like to learn what we’re trading and looking at for the time being, you’re welcome to join us live in our weekly member webinar.  Until then, good luck trading out there and we look forward to working with you soon.

Now that we’ve reviewed our 2025 predictions and how they unfolded, we turn to our outlook for 2026. This analysis focuses less on narratives and more on the structural forces shaping markets—policy constraints, capital flows, volatility dynamics, and second-order effects across assets and sectors. We begin with politics and global power shifts, as these remain the primary drivers influencing macro outcomes in the year ahead.

NOTE: while the first five are free, the remaining nine predictions are only available to TTM members. If just a few of our predictions are right, they can pay for the course itself. Only for January get 26% off the course price with coupon code NEWYOU26.

I. Politics & Global Power Shifts in 2026

1. The United States Moves Further Toward ‘Transactional’ Global Leadership

In 2026, the United States continues its shift away from rules-based global leadership toward a transactional, deal-driven model of power.

This transition was clearly signaled by Trump in 2025 through the expansion of tariffs and the willingness to apply economic pressure broadly, regardless of historical alliances. The underlying message was unambiguous: cooperation with the United States is conditional, and access—whether to trade, technology, or security—comes with explicit expectations.

We expect this framework to persist and deepen in 2026, particularly across:

• Trade and supply chains
• Technology access and export controls
• Defense, security, and strategic cooperation

Economic coercion—via tariffs, sanctions, and export restrictions—will remain a primary tool of leverage rather than a last resort.

Second-order effects:
As a response, more countries will quietly accelerate efforts to:

• Diversify supply chains away from U.S. dependence
• Reduce exposure to U.S. policy risk
• Incrementally diversify currency reserves

This does not imply a sudden collapse of U.S. influence, but rather a gradual erosion of trust in the durability and predictability of U.S. commitments.

2. Domestic Policy in 2026: Executive Action Over Legislation

Domestically, 2026 is likely to be characterized by greater reliance on executive action (or EO’s, executive orders) rather than through a legislative progress.

Following economic cooling and persistent inflation pressures in 2025, political accountability has increasingly shifted toward the current administration. As a result, policy communication will become a market driver. Announcements—often made rapidly and with limited advance signaling—will frequently precede detailed policy implementation.

We expect:

• More abrupt policy signals
• Faster market reactions
• Increased gap risk around political headlines

Market implication:

Short-term volatility spikes tied to political communication are likely to be a recurring feature in 2026, particularly during the first half of the year.

3. Midterm Elections as a Constraint on Presidential Power

The 2026 midterm elections introduce a meaningful constraint on U.S. policy execution.

The base case is increased legislative gridlock, driven by voter dissatisfaction with economic fatigue, foreign spending priorities, and domestic cost-of-living pressures. Even without a dramatic political shift, narrow margins increase the probability that at least one chamber of Congress will change hands.

Should Republicans lose control of the House while narrowly retaining the Senate, the final years of the administration would be shaped less by legislation and more by:

• Executive orders
• Regulatory actions
• Trade and foreign policy maneuvers

Second-order market impact:

Legislative gridlock tends to reduce the probability of sweeping fiscal changes, which the markets will likely interpret as stabilizing. However, it simultaneously increases the likelihood of episodic, headline-driven volatility (think tweets or Truth social posts), as executive actions replace negotiation.

This political backdrop forms the foundation for the macro, currency, and market dynamics discussed in the sections that follow.

II. The U.S. Economy, the Dollar (USD), and the Bond Market in 2026

1. The U.S. Economy: Deceleration Without a Clean Narrative

The most likely economic outcome for 2026 is growth deceleration rather than a clear recession.

After a year marked by cooling momentum and persistent inflation pressures, the U.S. economy enters 2026 with a smaller margin for error. Labor market conditions are expected to soften further, driven by a combination of cyclical slowdown and accelerating adoption of automation and AI across white-collar and service-oriented roles.

Market narratives will oscillate between:

• A “soft landing” scenario
• Fears of a sharper equity drawdown or recession

Our base case sits between these extremes. While a deep contraction is not the most probable outcome, the risk of a meaningful equity correction—on the order of 10–15%—is elevated, particularly during the first half of the year as policy uncertainty, earnings expectations, and inflation concerns intersect.

Second-order implication:

Cyclical and value-oriented sectors are more likely to underperform early in the year and improve later, as expectations reset and visibility increases.

2. The U.S. Dollar: Structural Headwinds Build

In 2026, the U.S. dollar faces gradual but persistent structural pressure.

Two forces are particularly relevant:

1. Supply-chain diversification and reserve reallocation
   As countries adjust to a more transactional U.S. foreign policy posture, diversification away from U.S.-centric supply chains continues. This is accompanied by incremental, long-term diversification of currency reserves away from the USD.
2. Fiscal and balance-sheet concerns
   Rising public debt, combined with increasing household leverage and financing costs, adds to longer-term confidence concerns surrounding U.S. fiscal sustainability.

These forces do not imply a sudden collapse of the dollar’s reserve status. Instead, they point to relative weakness over time, punctuated by episodic strength during periods of global risk aversion.

Market implication:

The dollar is likely to trade in broader ranges, with rallies driven more by fear than by confidence. Overall, this combined with more rate cuts in 2026 and we lean towards a weakening USD.

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For Trading Masterclass course members, continue reading the article here. If you aren’t a course member and would like to read the remaining 9 predictions, you can become a TTM member here. For the month of January, get 26% OFF with coupon code: NEWYOU26.

The following are the overall topics covered:

3. Bonds

III. Markets, Volatility, Inflation, and Key Assets in 2026

1. Equity Markets
2. Volatility in 2026
3. Inflation
4. Gold and Silver

IV. AI, Technology, and Sector Positioning in 2026

1. AI in 2026
2. Second- and Third-Order AI
3. AI Leaders
4. Sector Winners and Losers

In Closing

As we write this, 2025 is ending. Before releasing our full 2025 trading performance results, we wanted to do something few market commentators are willing to do — publicly grade our predictions.

Anyone can make bold calls. What matters is accountability.

Below is our full 2025 prediction scorecard. Some calls were spot-on and highly profitable for traders who followed them. Others delivered mixed results. The goal here isn’t perfection — it’s transparency, learning, and sharpening the edge going forward.

Prediction #1:

There will be a change in the world order after this quarter in 2025

This prediction proved highly accurate.

The most significant shift in the global order during 2025 stemmed from changes in U.S. trade policy under President Trump, particularly the widespread implementation of tariffs. These policies materially altered long-standing economic relationships, including those with the United States’ two largest trading partners, Canada and Mexico. Additional tariffs were later expanded globally, signaling a broader departure from prior trade norms and agreements.

The deeper implication of these actions is not simply higher tariffs, but a structural shift in how the United States engages with the world. Two key realities emerged:

1. Prior trade agreements became functionally irrelevant.
   Policies negotiated under previous administrations were no longer treated as binding or durable, increasing uncertainty for governments and global businesses alike.
2. The traditional concept of U.S. “allies” weakened.
   Trade relationships increasingly became transactional rather than cooperative. Countries were no longer differentiated as allies versus competitors, but instead as compliant or non-compliant with U.S. economic demands.

Taken together, these changes marked a clear break from the post-WWII, rules-based global trade order. Markets, currencies, and geopolitical alignments adjusted accordingly throughout 2025.

As a result, we consider this prediction not just directionally correct, but one of the most consequential macro calls of the year.

Prediction #2:

The First Half of 2025 Will Be More Volatile than the Second Half

This prediction also proved accurate.

Market volatility in 2025 was heavily front-loaded, with the first half of the year experiencing significantly larger price swings, sharper drawdowns, and faster regime shifts than the latter half. Equity indices, particularly the S&P 500, saw repeated volatility spikes driven by policy uncertainty, tariff announcements, and macro re-pricing events early in the year.

By contrast, the second half of 2025 was characterized by more stable market behavior. While trends remained active, price action became more orderly as markets adjusted to the new policy environment and macro expectations stabilized.

Several factors contributed to this volatility compression:

1. Policy uncertainty peaked early.
   Markets reacted sharply to new trade policies and geopolitical developments in the first half of the year, creating frequent volatility shocks.
2. Expectations reset by mid-year.
   Once tariffs and policy direction became clearer, risk assets repriced and volatility declined as uncertainty was replaced by known constraints.
3. Positioning normalized.
   Extreme hedging and speculative positioning seen earlier in the year gradually unwound, contributing to calmer price action.

A simple comparison of weekly S&P 500 price behavior between the first and second halves of the year illustrates this clearly, with larger ranges and faster reversals concentrated in the first half.

As such, we consider this prediction decisively correct and highly actionable for traders who adjusted risk exposure accordingly.

Prediction #3:

One New War Will Begin While a Current Conflict/War Will End

This prediction was partially correct.

We anticipated that one existing geopolitical conflict would reach a resolution during 2025, while a separate, new conflict would emerge elsewhere. The first half of that forecast materialized: the Israeli–Palestinian conflict moved toward de-escalation relative to prior years, reducing its intensity and global market impact.

However, the second half of the prediction did not fully play out. While geopolitical tensions remained elevated across multiple regions, no clearly defined, large-scale new war emerged that met the threshold implied in our original forecast.

This outcome highlights an important distinction between persistent geopolitical risk and formal conflict escalation. Throughout 2025, markets contended with ongoing regional instability, proxy tensions, and diplomatic friction, but without the ignition of a new, dominant war event capable of reshaping global risk pricing.

As a result, we assign partial credit to this prediction: one component was directionally correct, while the second did not meaningfully materialize within the year.

Prediction #4:

If Trump Fulfills Some of His Main Campaign Promises (Mass deportation, tariffs, tax cuts for big business), This Will Jump

This prediction delivered mixed outcomes across the variables we identified.

We expected that if President Trump moved forward with core campaign policies—specifically broad tariffs, aggressive immigration enforcement, and tax incentives for large businesses—the result would be renewed inflationary pressure, rising long-term interest rates, higher agricultural commodity prices, and downward pressure on U.S. equities.

In practice, the results were uneven.

Inflation did increase following the implementation of tariffs, aligning with our core thesis that trade barriers would raise input costs and consumer prices. Agricultural commodities also advanced, reflecting higher production costs and supply-side distortions.

However, other components of the forecast did not materialize as expected. Despite inflationary pressures, U.S. Treasury yields—particularly the 10-year—did not rise materially. Additionally, U.S. equities, including the S&P 500, remained resilient and ultimately moved higher rather than declining.

This divergence underscores a critical macro lesson from 2025: inflationary policy does not always translate into higher long-term yields or weaker equity markets when growth expectations, capital flows, and global demand for U.S. assets remain strong.

As such, we classify this prediction as partially correct. The inflation and commodity impacts aligned with expectations, while the interest rate and equity market responses did not.

Prediction #5:

These Stocks Should Do Well in 2025

This prediction proved highly accurate.

We identified U.S. financials—particularly large banks and financial services firms—as a sector positioned to outperform in 2025. Our thesis centered on improved net interest margins, capital strength, regulatory tailwinds, and the ability of major institutions to benefit from higher nominal economic activity.

Specifically, we highlighted the following names:

• Citigroup (C)
• JPMorgan Chase (JPM)
• Visa (V)
• Financial Select Sector SPDR Fund (XLF)

The year-end performance validated this view:

• C: +64.8%
• JPM: +34.3%
• V: +10.5%
• XLF: +61.4%

Average return across all four positions: +42.75%.

Three of the four significantly outperformed the S&P 500, with relative outperformance ranging from approximately 20% to nearly 40%. Even the weakest performer in the group delivered positive absolute returns.

This outcome reinforces the importance of sector-level positioning during macro regime shifts. While much of the market narrative in 2025 focused on technology and AI, financials quietly delivered superior risk-adjusted performance for investors who recognized the underlying structural advantages.

Overall, this was one of our strongest and most actionable predictions of the year.

Prediction #6:

Options & Trading Volumes Should Remain Strong, With Possibly 0 DTE Coming to Single Stocks

This prediction proved directionally and structurally correct.

We anticipated that options trading activity would remain elevated throughout 2025, driven by increased retail participation, institutional hedging demand, and the continued growth of short-dated options strategies. In particular, we highlighted the potential expansion of same-day (0DTE) options beyond index products and into single-stock markets over time.

While 0DTE options did not formally launch for individual equities in 2025, overall options activity reached historic levels. Multiple options expiration cycles during the year recorded some of the highest notional delta exposures ever observed, underscoring the growing influence of derivatives on underlying price behavior.

The data supports this trend:

• Total SPY options volume exceeded 14 billion contracts in 2025, up from just over 10 billion in 2024.
• SPY share volume also increased meaningfully, rising from approximately 14.63 billion shares in 2024 to 18.08 billion shares in 2025, an increase of roughly 24% year over year.

These figures reflect a broader structural shift in how market participants express risk, hedge exposure, and trade short-term price movements. Even without the formal rollout of single-stock 0DTE products, the demand for shorter-duration optionality and higher trading frequency continued to intensify.

As a result, we consider this prediction accurate, particularly in its identification of a long-term structural trend rather than a single product launch.

Prediction #7:

Circling Back to Trump’s Tariffs, If They Go Into Play…

This prediction produced mixed results, largely due to the difference between bilateral currency performance and relative performance across the broader G7 and global FX landscape.

Our original thesis was that the imposition of U.S. tariffs on Canada and Mexico would exert downward pressure on both the Canadian dollar (CAD) and the Mexican peso (MXN) by increasing trade friction, reducing export competitiveness, and weakening cross-border capital flows.

In bilateral terms, both currencies performed better against the U.S. dollar than anticipated, supported by U.S. dollar softness, shifting interest rate expectations, and capital reallocation dynamics. On this basis alone, the prediction would appear incorrect.

However, when viewed in a broader context, both the CAD and MXN underperformed relative to other major global currencies, including the euro and the Japanese yen. Against a composite G7 currency basket, both currencies lost ground over the year, reflecting the structural drag imposed by trade uncertainty and tariff-related risk.

This outcome highlights a key FX principle: currency performance must be evaluated on a relative, multi-pair basis, not solely against the U.S. dollar. While the bilateral USD pairs masked some of the weakness, relative performance measures confirmed that tariff pressures were a meaningful headwind.

As such, we classify this prediction as partially correct.

Prediction #8:

If Trump and Musk Remain Friends, TSLA Will Likely Head To…

This prediction proved largely accurate, both in direction and in sequence.

Our original assessment was that President Trump and Elon Musk were unlikely to maintain a long-term alliance. The reasoning was straightforward: both individuals exhibit dominant leadership styles and strong personal brands, making sustained cooperation structurally unstable over an extended period.

We anticipated that Tesla would initially benefit from the perceived alignment between the two figures, followed by heightened downside risk once the relationship deteriorated. The key elements of the forecast were as follows:

• Tesla shares would experience upside momentum during the period of perceived political alignment.
• SpaceX would benefit from increased government contracts and favorable policy treatment.
• A breakdown in the relationship would trigger a sharp repricing in Tesla shares.

The outcomes closely tracked this framework.

Tesla shares approached the projected upside target, reaching highs just below the $500 level before peaking late in the year. During the same period, SpaceX secured additional government support and contracts, aligning with expectations.

Following the deterioration of the Trump–Musk relationship, Tesla experienced a rapid and severe decline. Within months, shares fell by more than 50%, declining from peak levels to lows near $214 in early April, consistent with our expectation of a material downside move following the political split.

While the precise upside price target was narrowly missed, the broader sequence, timing, and magnitude of the move validated the core thesis. As a result, we consider this prediction correct, particularly in its identification of relationship-driven risk as a key catalyst for volatility.

Prediction #9:

The Eco-System Around AI Will Offer…

This prediction proved highly accurate.

Our thesis was that while leading artificial intelligence companies would continue to benefit from secular AI adoption, some of the most significant upside in 2025 would occur in the infrastructure and ecosystem surrounding AI, rather than in the most visible, headline names.

Specifically, we argued that as AI models scaled, demand would accelerate for the underlying resources required to support them—data storage, compute infrastructure, networking, and AI-adjacent hardware—creating outsized opportunities in less crowded trades.

The results strongly supported this view.

While core AI leaders delivered solid performance—such as NVIDIA advancing approximately 37% and Meta gaining around 11%—several ecosystem companies dramatically outperformed:

• Seagate Technology (STX): +215%
• Western Digital (WDC): +280%

These gains significantly exceeded returns from many of the most widely owned AI stocks, despite receiving far less attention in mainstream market narratives.

This outcome reinforces a critical investment principle: second-order beneficiaries of technological revolutions often outperform first-order leaders once adoption reaches scale. By focusing on the infrastructure layer of AI rather than solely on model developers, investors were able to capture superior risk-adjusted returns in 2025.

As such, we consider this prediction decisively correct.

Prediction #10:

Circling Back to Trump and Musk, If They Remain Friends, This Country Will Benefit

This prediction produced mixed and still-evolving outcomes.

The original thesis was that if President Trump and Elon Musk maintained a cooperative relationship, U.S. policy toward China would likely become more pragmatic and less restrictive, particularly in areas related to technology, manufacturing, and capital flows. The expectation was that Musk’s business exposure and strategic interests in China could influence a softer policy stance.

In practice, the results were uneven. On one hand, certain restrictions were relaxed, including the continued sale of advanced U.S. semiconductor technology to China, suggesting a degree of policy flexibility. On the other hand, tariff pressure on Chinese goods remained elevated, reinforcing a more confrontational trade posture.

This divergence reflects an important reality of 2025: U.S.–China policy was shaped by competing forces rather than a single coherent strategy. Strategic competition, domestic political considerations, and economic pragmatism all exerted influence simultaneously.

Given the partial alignment with the original thesis—and the fact that China policy remains highly contingent on future geopolitical events, particularly around Taiwan—we classify this prediction as mixed rather than incorrect.

This forecast may ultimately be resolved by future developments rather than fully adjudicated within the 2025 timeframe.

2026 Predictions?

Our 2026 outlook will be published shortly. If 2025 taught us anything, it’s that regime shifts matter — and 2026 is shaping up to be another inflection year. We’ll focus less on headline narratives and more on the structural forces, second-order effects, and asymmetric risks that tend to matter most when regimes change. Stay tuned and we hope to be working and trading with you in 2026!