Every meteoric stock spike eventually runs out of gas.
And when it does, traders like you and me have a perfect opportunity to target the pullback.
For weeks we’ve watched a specific sector shoot higher …
It was on our radar way before January 2026. But already this year it’s pushed to new all-time highs nine times.
And finally, we could be looking at a point of exhaustion.
After the insane spike this week, major headlines are questioning whether the sector’s broken altogether.
That’s a hint that we could be close to a free fall.
And when overextended stocks fall lower, we can trade the price action with well-timed Put contracts.
This is different from short selling. Short positions are riskier because you can technically lose more money than you put in. Put contracts protect us from that phenomenon while we take advantage of the same volatility.
What goes up must come down.
And right now, I’m looking at a mile high sector practically begging for a pullback.
The Mile High Sector
Precious metals continue to defy all market expectations and rip higher.
The iShares Silver Trust (NYSE: SLV) erupted 144% in 2025. Then it turned the calendar and kept sprinting. It spiked 70% year-to-date through January 29, 2026.
Gold confirmed the move. SPDR Gold SHares (NYSE: GLD) stacked a 63% gain in 2025 and is already up 28% YTD in 2026.
The entire sector is going bananas.
And no, I don’t think the move is sustainable. In fact, the intraday pullbacks are getting more sharp.
Look at a chart of SLV thus far. Every candle represents one trading day:
The freefall on January 29 was pretty drastic. It could be the first of multiple red candles to come …
Put Trades
I’ve already traded multiple Put contracts on this SLV spike that I had to cut for losses.
It’s OK. Losses are part of the game.
And as referenced by the headlines … Even Wall Street is confused about this move. So I’m not the only one who’s caught off guard.
Look at the headline below:
The reason for the spike is two pronged:
- Greater demand from the tech sector.
- Save haven buying due to geopolitical concerns.
Both of those catalysts are valid and stand strong in the market. But in my opinion,the move we’re seeing right now in the precious metals sector outpaces both of those catalysts.
It’s due for a pullback. I’m still looking for Put trades with defined risk levels.
The paper cuts I took on the way up will be worth it when this sector comes falling down.
Keep your head on straight. Respect your risk. And take some gains early to build a cushion.
Stay Street Smart,
Jeff Zananiri
