The Week Ahead 2/8/26
Hello All,
I hope you’re all enjoying the weekend and getting some time away from the screens & wishing you all a successful ‘26 ahead.
Looking back at this past week, despite the lack of economic data, it was nothing short of a ‘jam-packed’ week & the week can essentially be characterized by a combination of a larger factor / leverage unwind driven by the outperformance across Value, Cyclicals, and Equal-Weight, while on the other hand, we saw drastic underperformance out of Tech, SaaS more specifically, as the rotation to Value over Growth continued as the week progressed (10% spread Year-To-Date).
And of the indices, the Dow ended up being the best performing of the group, having closed higher by just under 250bps whereas the Q’s closed out the the week lower by nearly 200bps & were of the worst performing of the indices on the week:
- Economic Data for the Coming Week:
In regard to economic data into the upcoming week, this week is a bit of a busier one with the most important economic datapoint being on Wednesday (NFP #’s) whereas throughout the remainder of the week, we just have Retail Sales on Tuesday along with CPI #’s on Friday, but besides that, it should generally be a quieter week.
- STD Channels on Indices for Perspective: Weekly TF
- SPY
- QQQ
- IWM
- DJIA
Since starting this Substack back in June of ‘23, between individual names / tactical trades / baskets, we have netted a 183.93% return whilst in the same period, the Q’s have returned 73.01% / Spooz has returned 65.28% / Dow has returned 55.05% & Small-caps have returned 51.27%, so nice outperformance against all the indices whilst having a 81.7% win rate, averaging a 28.02% return on realized gains / winners & a 15.25% loss on realized losses / losers.
Looking forward to the future & continued success through ‘26.
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.
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:
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.’
Before we jump into the week ahead, looking back at this past week, the general theme of the week was a continued amplification of the recent Growth to Value rotation as the outperformance amongst Cyclicals & or ‘Real Economy’ names continued thus having led to a 10% spread between Value & Growth Year-To-Date:
And just to zoom out in respect to the magnitude of the spread between Value & Growth that we saw this past week, on this past Wednesday, Value posted it’s 3rd largest 1-day outperformance against Growth in history:
And another chart reinforcing the point above but this past Thursday marked the 4th worst one-day momentum vs value drawdown since ‘99, based on Morgan Stanley’s long baskets:
In terms of what exactly drove this recent amplification, it essentially boiled down to two key factors on the week:
- The first being the ISM Manufacturing Index having jumped to 52.6 earlier on in the week which was the highest level reached since January ’22 & essentially put further emphasis that the economy is undergoing a re-acceleration (Thus driving outperformance across Cyclicals & Value which were significantly under-owned heading into the year).
- And secondly, the apocalypse across SaaS & Tech driven by the quick and swift pricing-in of terminal risk related to AI threats which has since led IGV to fall just over 30% off the highs whilst also having come into contact with the 200wk this past week:
And in regard to the pricing-in of an economic re-acceleration, of the 5 best performing sectors YTD, 5 of them are Cyclical:
- Energy (Cyclical)
- Materials (Cyclical)
- Staples (Defensive)
- Industrials (Cyclical)
- Real Estate (Cyclical)
And as a result, this broadening of upside participation & or expansion of breadth led the Advance-Decline Line to make a new ATH despite Spooz for example still sitting 100bps off ATHs. General point being, despite the lackluster action amongst both Spooz & the Q’s, upside participation has drastically increased driven by the outperformance amongst Small-caps & Cyclicals:
But with that being said, we did see quite the unwind in leverage this past week before the indices then went on to bottom Thursday night before then posting a large snapback on Friday but even despite the positive round off to the week, still only 53% of stocks remain above the 20D which still is a more neutral signal rather than overbought & or oversold:
And similar can be said on a more broader timeframe as well as despite the lackluster action amongst both Spooz & the Q’s, still 59% of stocks remain above the 50D which highlights a market slightly in neutral territory after having recently come out of overbought territory. Again, this is mostly attributed to the broadening upside participation amongst the indices despite Tech specific sectors / Overall AI-Trade / MAG-7 performing lackluster YTD:
And the Fear-Greed index underscores the point just above as well as despite the % of stocks above the 20D & 50D remaining healthily in neutral territory, the Fear-Greed index sits barely within ‘Neutral territory’ after having recently come out of ‘Fear’ territory following the recent unwind just this past week:
And lastly, before we jump into the remainder of the week ahead, following the degrossing period / unwind in leverage this past week, despite the perceived market exuberance given indices are still essentially sitting & or are making new ATHs, Goldman’s U.S. equity sentiment indicator STILL remains near neutral which emphasizes positioning thats far from stretched territory which is typically associated with true market euphoria:
