With January come and gone, one trend is clear: Energy is leading the pack in 2026.
The State Street Energy Select SPDR ETF (XLE) finished last week as the top-performing sector again, up 3.8%. And in a year where the S&P 500 is barely positive, XLE is up over 14% through the end of January.
At the bottom of the heap is the State Street Healthcare Select SPDR ETF (XLV), which finished the week down 1.7% after President Trump really put the screws to health insurance companies in an attempt to lower consumer prices.
So, what’s next for the energy and healthcare sectors? We’ll cover that shortly.
But first, let’s say a quick word on gold.
Gold went parabolic in the second half of January, with the price rising by about $1,000 per ounce. As I wrote last week, investors had lost faith in the system and were desperately looking for alternatives to the dollar.
Then, once Trump announced that his choice for Fed Chair was the historically hawkish Kevin Warsh, suddenly the dollar’s fate seemed a little more secure. What started as profit taking turned into a rout, with substantially the entire $1,000 parabolic move erased.
So, what happens now?
Does gold find a bottom and resume its uptrend? Or was last week’s action a blow-off top that signals the end of the bull market?
I doubt it. While Warsh’s nomination calmed Wall Street’s nerves a bit, the Fed’s reputation is still mud after 25+ years of sloppy management. And Congress is still borrowing and spending like a bunch of drunken sailors on shore leave.
Gold remains a solid all-purpose hedge against poor currency management. And a week of rollercoaster price action doesn’t change that.
Of course, we were early to the gold trade. I saw the movement in gold as a fantastic trading opportunity last year and recommended multiple monster trades in gold mining stocks in my Infinite Momentum Alert.
For instance, last month I closed out a 131% gain in Barrick Mining Corporation (B) that we had held for about six months. And we had various other gold miners with returns ranging from 32% to 66%.
And the beauty of the Infinite Momentum strategy is that we won’t be left holding the bag when the move is over. The portfolio is refreshed every month, ensuring that we’re constantly passing the baton to the stocks best positioned to run. By the time the volatility hit gold prices last week, we were already out of gold mining stocks.
Key Insights:
- Energy continues to dominate the market in 2026 as the best-performing sector.
- Political risk has hit the shares of healthcare stocks hard.
- Gold prices have been on a roller coaster, but the underlying trends remain strong.
Drilling into the Energy Sector
Let’s get back to those energy stocks that have been ripping higher…
I ran my customary screen of the biggest movers last week that were also still within 10% of their 52-week highs. The idea is to look for strong, market-leading stocks that are getting stronger.
One familiar name jumps immediately off the page. I highlighted Baker Hughes (BKR
We were early to this trend as well. BKR is an open position in my Infinite Momentum Alert and up about 24% since I first recommended it in July.
If you’re looking for something with a little more oomph, give Diamondback Energy (FANG) a look. The shares jumped higher by 6.5% last week and rate as “Bullish” on my Green Zone Power Ratings system. As a domestic fracker, FANG lives and dies by the price of crudge oil. But if you believe, as I do, that “old economy” stocks are likely to keep up their outperformance in 2026, Diamond back is an aggressive way to trade that trend.
Healthcare is a Political Punching Bag
It’s been a rough road for healthcare.
President Trump really fired a shot across the bow when his administration proposed keeping Medicare rates flat for insurance companies. “Affordability” has become a political buzzword for both parties over the past year, and it’s not hard to see why. Inflation in health insurance premiums has massively outpaced overall inflation, and consumer (who are also voters!) have started to push back.
Here’s my take…
I don’t invest based on what a politician might or might not do. Political risk is notoriously hard to model, and I don’t have an edge there. When I invest, I stick to trading scenarios where I do have an edge. I follow a battle-tested system.
Let’s take a deeper look at the healthcare sector to see if there are any babies that have been thrown out with the bathwater. I ran my customary screen of the sector’s biggest losers for the week that are still trading within 10% of their 52-week lows. The idea is to find a beaten-down gem that is poised to recover.
This is what popped up on my screen:
For a list of “biggest losers,” it’s a little unusual to see most of the stocks on the list with positive returns on the week. But that’s where healthcare is today. Because most of the stocks are trading over 10% of their 52-week lows, health insurer Humana (HUM) was the only one that took a hit last week and still met our criteria.
So… should we ignore the political risk and buy the dip in Humana’s shares?
No.
The shares rate as “Bearish” on my Green Zone Power Ratings system, as do the shares of the other stocks on the list. My system is telling us to steer clear for now.
To good profits,
Adam O’Dell
Editor, What My System Says Today
P.S. I’ll be going LIVE this Thursday afternoon at 1 PM EST with a very special Infinite Momentum presentation!
This live webinar is free for all subscribers of What My System Says Today (that means YOU), and I’m urging everyone to tune in. Because the very next day, on Friday, you’ve got the opportunity to make one of the most decisive investing moves of the new year — tapping into a strategy that beat the market 3-to-1 in 2025!
So, save the date on your calendar. I’ll send you more details later this week…
