Nothing Is Safe
Hello All,
To kick the recap off, it’s been a relatively quieter week on the index level, although under-the-hood, there’s been plenty of volatility within single names, similar action to this past week, as the dispersion once again continues. With that being said, it’s been a quieter week with respect to economic data, although of the data reported, it’s been another week of much better-than-feared data as the ongoing pricing-in of an economic re-acceleration continues to take place (Outperformance Amongst Cyclicals).
Nevertheless, despite the large and continued factor rotations and unwinds, the Q’s as of now are the best performing of the indices on the week, currently higher by just over 40bps, whereas small-caps are the worst performing of the indices, yet are only lower by 20bps on the week, essentially flat.
For those who may have missed, we published our ‘2026 Outlook’ which has a plethora of coverage on a wide range of topics / themes as ‘26 kicks off after coming off a strong ‘25 & for those whom would like to go back & read the report, I included it just below:
And for anyone who wants to follow an actively managed portfolio in real time:
I’ve joined Plutus as the cleanest, day-to-day way to track an actively managed portfolio in real time. It’s a live dashboard that’s broader, more diversified, actively managed by me, & updated continuously.
The Eliant Flagship is published on RunPlutus.
Once your Plutus account is approved, you’ll have the option to allocate right away. If you do, it’s straightforward: create an account, link your brokerage (Available only for IBKR at this time), & select the Eliant Flagship (or any of the baskets I’ve built). Your money stays in your account, and trades, position changes, and rebalances are replicated automatically so there’s nothing manual to manage. The idea is to make it easier to access an actively managed portfolio run by me without the overhead of traditional fund structures or high minimums, whilst you keep full custody of your assets & I stay focused on research, positioning, and portfolio construction.
And just to be clear, NOTHING is changing with Substack. It’ll stay exactly what it’s always been since we originally launched in the Summer of ‘23: where I share the thinking, research, & select trades behind my personal PA, along with ongoing commentary across all markets.
Earlier in 2024, we launched a series titled Educational Pieces, covering a wide range of topics, many of which were suggested directly by you all (4-Part Series).
For those who may have missed the first installment, it covered topics including:
General background / knowledge on all option strategies
In-depth talk on risk / reversals & how to go about expressing / utilizing them
Options Structuring
When to used naked calls / puts vs. spreads
Choosing expiration dates
Identifying key pivots / supports / resistance zones
General briefing on stock gaps
What to look for in regards to fundamentals
Implementing fundamental / macro / technicals into a trade
Hedging
Creating risk/reward setups
Taking profits / managing losses
Overall Process
Book recommendations
A link to the original Educational Piece can be found here .
Given the positive feedback and how useful many of you found the first installment, we followed up with Educational Piece: Part Deux earlier in 2025 & for those who may have missed, a link to the piece can be found here & we then went on to release Educational Piece: Part Trois which can be found here.
And finally, the most recent installment, Educational Piece: Part Quatre, can be found here.
‘Risk management is the silent prerequisite for compounding & true wealth is built not by chasing the highest returns but by ensuring the survival necessary to realize them.’
To jump straight into it, the general theme of the week, thus far, has been a continued rotation toward Value over Growth which has essentially been the trend all year although it does seem like the spread between the two groups is nearing a ‘pause’ given the gap between the two groups has grown quite wide in such a short period of time, 10% to be exact.
With that being said, given the YTD outperformance of Value over Growth, the growing question into the coming months boils down to whether or not this recent trend is a lasting one (IWN/IWF Breakout) & or if it instead proves to be another ‘fakeout’ as its done so in prior instances:
And again, why has this period of Value over Growth outperformance been amplified more recently?
Well, the markets are pricing-in an ongoing economic re-acceleration.
Last week for instance, the ISM Manufacturing Index jumped to 52.6 which essentially is the highest level reached since January ’22:
Moving along into this week with todays job report, Manufacturing Payrolls posted their first gain since November ‘24:
And adding to the point above, today’s jobs report was another clear sign of underlying strength. January Nonfarm Payrolls came in at 130K versus 65K expected, alongside an unemployment rate of 4.3% versus 4.4% expected. Again, the beat reinforces that after a brief wobble in ‘25, the labor market is stabilizing rather than continuing to undergo a slowdown hence the continued pricing-in of an economic re-acceleration (Driving outperformance amongst cyclicals & or ‘real’ economy names).
And as we’ve touched on these last few weeks but in regard to the pricing-in of an economic re-acceleration, of the 5 best performing sectors YTD, 4 of them are Cyclical:
- Energy (Cyclical)
- Materials (Cyclical)
- Staples (Defensive)
- Industrials (Cyclical)
- Real Estate (Cyclical)
As a result, it’s led to quite the broadening of upside participation as despite Spooz being 100bps off the highs, the Advance-Decline Line has continued to churn and make higher-highs:
With that being said, despite the broadening of upside participation along with the continued higher-highs within the Advance-Decline Index, the % of Stocks Above the 20D still remains more neutral (Instead of overbought & or oversold), which is mostly attributed to the vast single stock volatility:
And similar can be said on a more broader timeframe as well as there is still 58% of stocks remaining above the 50D (Neutral Reading) despite the Nasdaq for example remaining below the 50D which just emphasizes the underlying dispersion within the markets:
And finally, the Fear-Greed index underscores the point above as well as despite the broadening of breadth & or upside participation given the continued new highs within the Advance-Decline Index, the Fear-Greed index still remains within ‘neutral’ territory which just circles back to the amount of dispersion within the markets along with single stock volatility despite the indices being near their respective highs:
