The Best Analyst You've Never Heard Of ;-)

• Historic Rotation From Growth-To-Value

• The HALO Effect

• THINGS OVER PAPER Continues

• The Best Analyst You’ve Never Heard Of ;-)

Historic Rotation From Growth-To-Value

I feel like a broken record everyday in my live trading room for MONTHS NOW, reviewing our tech shorts/value longs.

Now, everyone is glomming on! That’s good. I’m not complaining. But I do want to remind my NOV-FEB growth-to-value rotation - well documented - would result in volatility MAR-MAY, so my warning to clients ahead of March was to be much more careful.

Here is when I first highlighted this MONEY ROTATION theme:

Oct 14th I warned clients of an impending “ZERO DOLLAR CLUB” pullback. Tech got wrecked!

• Client post: SENTIMENT HAS TURNED!

Nov 26th I alerted clients to the early signs of a rotation into value and rec’d a bunch of large cap value plays that have rocked!

• Client post: Sell The Rumor of Consumer Cyclical Slowdown; Buy The News.

Jan 6th I update my value rotation theme: BOOMER STOCKS ARE THE NEW INFLATIONARY ASSETS.

• Client post: My 2026 INTERMARKET ANALYSIS ROADMAP For Market/Sector Direction & Key Themes

Guess What?

2026 has so far seen the second strongest relative performance for equal weight versus cap weight since 1990!

It’s time for an update on what got me to get us here and where we go from here…

Here’s the chart I posted of RSP:SPY back in that intermarket report:

RSP:SPY a long-time divergence showing signs of reverting...

This is how far away we are in that equal weight to cap weighted index comparison: FAR!

Here we are today: still FAR!

And here’s what else I called…

MAG7 ratio to rollover “INTO MAY”, while large cap value would outperform “INTO FEBRUARY”, and software (SaaS) tech shorts since Oct/Nov/Dec/Jan as perfect pair to my “boomer stocks are the new inflationary assets” long!!

And guess what? IT’S STILL WORKING!

Here’s the monthly view of the MAG7 ratio:

And my growth-to-value ratio warning below 2.3 with an update in mid-Jan is screaming right-tail/left-tail/chasing-its-tail next two months:

IWF:IWD - On the daily view, this 2.30 ratio (red arrow both panels) served us extremely well for my November call that VALUE would outperform Tech/Growth into likely February. So far it has been extremely profitable to short tech/long value.

And here we are approaching end of Feb…

Feb 2nd I warned clients about catching the falling knife in SaaS.

I wasn’t kidding. $IGV #MAG7

And I also said - long before knowing that Trump would foolishly bring 1/3 of our US naval and air military assets to the Middle East for Israel to provoke Iran and the region into potential war - that VIX would not fall into Mar-May timeframe as is seasonally the case, but rise. So far, this is also working…

The HALO Effect

Long after my Growth-to-Value rotation call that helped clients press tech short & value long, Josh Brown did a big push on his theme:

The most important investing theme of 2026 is HALO - Feb 8th

I love it when portfolio managers discover a sector rotation theme long after price has moved decidedly higher. That means, they will be buyers on any dip. It’s good for us already positioned ;-)

He starts his rant:

Repeat after me: Heavy Assets, Low Obsolescence

I know you want to play for a bounce in software…

I do too. Added to Uber, ServiceTitan and Toast this week at 52 week lows in my personal account. Probably too early, we’ll see.

Yes, it was too early to add software and a little late to be adding my recommended sectors of Materials, Energy, Staples, Industrials…

But as it turned out, it really just proved my point: MONEY ROTATES! And when investment shops notice, we have a sustainable trend!!

He goes on to lament that “This emerging theme does not currently have a name, which I am going to fix right now.”

Yes it did!

Mine:

BOOMER STOCKS ARE THE NEW INFLATIONARY ASSETS

But that’s fine. Josh and I are aligned. Nothing wrong with that:

I’m using the backronym H.A.L.O. to describe the types of stocks that I expect to serve as a winning haven from this year’s feverish pitch of disruption fear. HALO stands for Heavy Assets, Low Obsolescence. These are undistruptable companies from an AI standpoint. There’s nothing Sundar Pichai and Sam Altman can take from them.

HALO stocks are immune to Claude Code. Anytime people are freaking out about Claude Code and ripping capital out of the shares of its perceived gallery of victims, these are the types of stocks that are being bought instead.

He goes on to talk about XOM:

Exxon Mobil Corp is HALO.

OMG we were way ahead as my bullish bet XLE, of which XOM & CVX are the largest weightings, looked like this:

Last year I started my rant that I fully expected metals to outperform and oil to fall. That worked.

Now, I can see energy companies in XLE could follow a similar theme of outperforming SPX next few months (see bottom panel) - but not for the reasons most will think … from higher oil prices.

I see higher METALS pricing keeping a bid in LARGE INDUSTRIAL COMPANIES - including those that are used to extract, process, distribute oil & gas.

And here we are now:

I presented further intermarket support on where where I could see XLE:SPY moving...

And here we are now:

THINGS OVER PAPER Continues

My fave theme is cooking! Ok, so maybe my dollar debasement meets industrialization value longs WITH metals inflation meets AI disruption tech shorts has been usurped and renamed as the HALO trade, but hey, it is helps our positions, why not?

Why the ‘HALO’ trade boosting hard assets is no fluke, according to Morgan Stanley

The boost for non-digital sectors should last through the year, says Morgan Stanley’s Wilson

Here’s also what’s affecting the trend: Nvidia & AI are not deemed trustworthy.

Articles like this highlight why:
Turns out Generative AI was a scam

So has the de-risking in software stocks that continues to rip them apart sector-by-sector. I’ve done plenty of reviews on our tech shorts and concluded every time that the knife is still falling.

And what about my #1 sector rotation theme: MINERS since April 2024?

At this rate mining stocks will be the only sector chatbots can't disrupt. Zerohedge

Also, the Citrini piece is making the rounds...
with what was a high-level market call I already wrote about for my 2026 Predictions wherein MarketWatch published am excerpt from it end of December:

$8200 SPX highs on Wall Street from dollar falling...
with "Recession Into All Time Highs" from AI hitting jobs on Main Street

My article got like 1000 views to Citrini’s million. Whatevah. The more who see what I saw last year, the better the crowd will support our positions. The most important thing is that my market & sector rotation & stock selection work helps clients position on the right side of the trade so they can profit & protect. I’ve done my job, albeit quietly.

Also, Citrini & Alap have provided a lot of futuristic projections I did not. But I contend, 2028 is VERY hard to predict/model with any certainty, especially given Iran War Is Not Priced In.

And then there is China…

China’s DeepSeek is set to release a new AI model. A rough period for Nasdaq stocks could follow - CNBC.

I already warned in JANUARY 2025: THIS IS THE MANHATTAN PROJECT 2.0 that China views AI as infrastructure where Silicon Valley views AI as WINNER TAKE ALL.

And since then, China is winning with every release that matches U.S. capability at a fraction of the compute cost structurally undermines the $600B capex narrative holding Nasdaq’s AI premium together.

The Best Analyst You’ve Never Heard Of ;-)

I’m being facetious with that title, when in all sincerity, I want to thank you for being here, because clearly, not many see what I say or do and I am truly grateful you found me.

If you are new, please take a moment to review my December 12, 2025:

Wherein I literally explained:

This rotation is pure and simple: MONEY ROTATION out of AI STORY STOCKS into defensives/low beta from high beta/growth.

It’s SAFETY not confidence.

And then, if you’ve got time and curious how I arrived at my ‘HALO’ thesis before the crowd, check out my January 19th update/missive

Last but not least, my point in all of this is that… the CROWD now sees where we have profited past few months. My client warning of late is to PROTECT those value longs and NOT OVERSTAY those tech shorts as we move into what I predict will be a Mar-May volatility period. Once we get through the next few months, we will have a much higher conviction for rotation into tech after the crowd has completely lost interest & investor confidence has been shaken out.

I will continue to test my thesis daily live with clients in my trading room, so you can benefit from my laser-focus in finding where the money flow goes next before the crowd sees it.