Making Hay Monday – December 29th, 2025

3 weeks ago 391 views 5 min read

David Hay

Editor

Haymaker

Making Hay Monday

Year-End Trading Alert

Hello, Subscribers:

To say this has been a spectacular year for precious metals, and the miners thereof, is merely stating the obvious. What’s been a bit more below the radar has been that some of the industrially oriented metals have also been on a roll.

One whose price chart is particularly appealing to our eyes is aluminum. We called your attention to it in early November, noting that we felt this break above multi-year resistance looked more sustainable than the brief spike that happened in mid-2024. So far, that has turned out to be the case.

However, as we’ll soon discuss in more detail, today, Monday, December 29th, has brought a sharp reversal for all metals and their producers (aluminum is off 2.7% this morning). As usual, we composed the bulk of this note over the weekend; i.e, most of it was created before today’s big pullback.

Five-Year Price Chart of Aluminum (rolling spot contract)

Bloomberg

More significant, and fortuitously, our specific recommendation to play the emerging aluminum bull market was the old American blue-chip (or at least it was formerly a blue-chip), Alcoa. In about two months, it has ripped from around $37 to $53.50, despite today’s slam-fest in the metals complex.

At this price, it’s obviously not as compelling as it was 60 days ago. However, it does appear to be attempting to break above overhead resistance in the upper 50s. Of course, that remains a potential not a reality.

Five-Year Price Chart of Alcoa (AA)

Bloomberg

Further, using our trusty price-to-sales ratio for cyclical stocks, like AA, it now looks to be on the pricey side, as you can see below. In fact, it has only once, and very briefly, traded above the current level.

10-Year Price-To-Sales Ratio for AA

Bloomberg

As a result, our Trading Alert recommendation is to trim a decent amount of AA. The minor drop today shouldn’t be an impediment to taking this action. To us, aluminum itself looks like the better value at this point.

However, booking a gain this late in the year is not a deft move from a tax standpoint, unless, that is, you hold it in an IRA. If so, trim away; even a full sale in a tax-sheltered account might be a smart move… as long as you keep an eye on it for a re-entry point. If you don’t hold it in your IRA, you might look at it on Friday morning to see if it’s still around this price and then book it as a 2026 gain (though it will be short-term.)

It is tricky to buy aluminum itself unless you have a futures account (which serious high-net-worth investors should consider opening to gain access to more commodity opportunities, in our view). Apparently, if you have an account at Interactive Brokers you can buy the ALUM, ETF, sponsored by USCF. Be aware this does generate a K1 and it also incurs the futures market carrying cost known as contango. There is presently a very small differential with aluminum futures contracts; this means the rollover costs are negligible, a good thing.

Aluminum is also taking a hit today, down 2.7%. In our view, this is a chance to accumulate it at an attractive price for those who missed it initially.

Now let’s move onto the red metal whose price has suddenly become red hot…