February 1st, 2026 | tastylive's First Call

First Call - February 1st, 2026: Market Review & Outlook

Key Concepts:

• Margin Pike: An increase in margin requirements by the CME for precious metals futures, triggered by increased volatility.
• Worsh Nomination: The nomination of Kevin Worsh to the Federal Reserve, a known hawk, potentially signaling a shift towards tighter monetary policy.
• Non-Farm Payrolls (NFP): A key economic indicator released monthly, measuring the net change in employment.
• VIX: The CBOE Volatility Index, a measure of market expectations of near-term volatility.
• Liquidity Crunch/Squeeze: A situation where there is a sudden and significant decrease in market liquidity, leading to rapid price movements.
• Extrapolation: The assumption that current trends will continue indefinitely.
• Shadow Fleet: Vessels used to circumvent sanctions, often transporting oil from countries like Russia, Iran, and Venezuela.

I. Market Overview – Weekend Review (January 31st - February 1st, 2026)

The week saw significant volatility across asset classes. While the S&P 500 showed a modest gain of 0.29%, the NASDAQ declined by 0.27% and the Russell 2000 experienced a more substantial drop of 2.05%. The most dramatic moves occurred in the metals markets, with gold and silver suffering their worst single-day performance since 1980. Silver plummeted 22.25% and gold fell 5.4% over the week. Platinum also saw a significant decline of 22.6%, while copper remained relatively stable, down only 0.4%. The dollar weakened initially but recovered slightly towards the end of the week, influenced by the Kevin Worsh nomination. The Japanese Yen, Canadian Dollar, and Australian Dollar all appreciated against the dollar, with the dollar down 0.56% overall. Bitcoin experienced a sharp sell-off, losing 8.1%, with over $100 billion in liquidations over 24 hours, and Ethereum fell 14.38%. Even bonds didn’t offer refuge, also declining.

II. Precious Metals – A Dramatic Correction

The metals markets were the focal point of the week’s volatility. Ilia Spivac, who was short silver, noted the unexpected magnitude of the sell-off. Despite the sharp decline, he maintains a long-term constructive outlook on gold and silver, viewing the current downturn as a correction of speculative excess. He plans to monitor price action for signs of exhaustion and potentially flip his short position to long. The CME issued a margin hike alert for all precious metals products: gold (33%), silver (36%), platinum (25%), and palladium (14%), citing increased volatility. This margin increase is a standard response to price surges and volatility, potentially exacerbating the downward pressure. Spivac highlighted a historical parallel to 2011, where margin increases contributed to a market decline.

III. Geopolitical Factors & Oil Markets

The situation in the Middle East was closely watched, but no escalation occurred over the weekend. Despite this, oil prices fell 2.7% as the market seemingly priced in the lack of immediate conflict. Spivac emphasized that the underlying narrative supporting higher oil prices – including potential disruptions to supply due to geopolitical tensions and the US seizure of tankers involved in the Russian shadow fleet – remains intact. He identified a key support level for WTI crude at $62.30, suggesting a potential buying opportunity if that level holds.

IV. Central Bank Calendar & Dollar Implications

This week features key policy decisions from the Reserve Bank of Australia (RBA), the Bank of England (BOE), and the European Central Bank (ECB). The RBA is expected to hike rates by 50 basis points, potentially strengthening the Australian dollar. The BOE is expected to hold rates but signal a potential cut later in the year. The ECB is expected to remain on hold. The Worsh nomination, with his hawkish stance, adds complexity. A more hawkish Federal Reserve, coupled with continued tightening by other central banks, could provide support for the dollar, but the overall outlook remains uncertain.

V. Equity Markets & Earnings Season

Equity markets experienced broad-based weakness, with the NASDAQ underperforming. The sell-off wasn’t limited to the “Magnificent Seven” stocks, as evidenced by the similar decline in the equal-weighted NASDAQ index. Earnings season is underway, with mixed results. Software companies, particularly those linked to OpenAI, have faced headwinds. Google (GOOGL) is a standout, with a strong chart and positive momentum, making it a potential long opportunity for Chris Veio, who holds a call spread position. Veio noted that the current market environment, characterized by rising volatility, could lead to a more pronounced earnings reaction than in recent quarters.

VI. Bitcoin & Crypto Markets

Bitcoin experienced a significant sell-off, driven by a combination of factors including regulatory uncertainty, liquidations, and a shift in market sentiment. Spivac, who had previously been long Bitcoin, flipped his position to short on the break of a recent range around 846-847. He believes Bitcoin is currently exhibiting neither the characteristics of a risk asset nor a safe haven, and that the price action is signaling a lack of desire to rally. He identified the April 2023 lows near $75,000 as a key level to watch.

VII. Non-Farm Payrolls (NFP) & Fed Policy

The upcoming Non-Farm Payrolls report on Friday is a crucial data point. Spivac suggested that the Fed may be using a modified metric, subtracting 60,000 from the headline number to assess the labor market’s health. A weaker-than-expected report could prompt the Fed to reconsider its stance on rate cuts, particularly given recent comments from Christopher Waller suggesting slowing job growth in 2025.

Notable Quotes:

• Ilia Spivac: "This has been a trend we've been following for months and at some point as a trend follower you're going to take a trade in the trend that just doesn't work. And that's how you know it's over."
• Chris Veio: "If you liked it at 117, Chris, you must love it at 74." (referring to silver)
• Ilia Spivac: "When the price action diverges from what have been supportive forces before, believe the price action. Leave the price action because that's what you get paid on."

Conclusion:

The market is currently navigating a period of heightened volatility and uncertainty. The dramatic sell-off in precious metals, coupled with weakness in equities and cryptocurrencies, reflects a shift in risk sentiment. The upcoming central bank meetings and the Non-Farm Payrolls report will be key catalysts for the week ahead. The Worsh nomination adds a layer of complexity, potentially signaling a more hawkish stance from the Federal Reserve. Investors should remain cautious and monitor price action closely, as the market environment is prone to rapid shifts. The long-term outlook for gold and silver remains constructive, but a period of consolidation or further downside is possible.