Good morning. Let’s get into it.
After the semiconductor bottlenecks framework we discussed last week, the obvious next question is: where do you diversify in 2026 beyond tech?
The key point is this: you know the market is already rotating, as I discuss this almost daily in my Morning Market Updates since the Dec 13th rate cut, but it is not rotating evenly.
The leadership handoff is well underway.
In January, the S&P 500 (white) was up 1.45%, but the rally broadened: S&P MidCap 400 (blue) +4.05% and S&P SmallCap 600 (green) +5.61%, while the S&P 500 Top 50 (orange) was -0.47%.
Of course, leadership broadening does not just mean “go buy small cap.”
Rather, we want to uncover exactly which sectors are gaining momentum and still have runway outside of tech.
To answer that, I score every sector using a multi-factor rubric so you can position with new leadership as it develops, not after the headlines catch up.
What this letter covers
The exact multi-factor rubric used to rank every S&P sector
The full sector scorecard (price, trend, and forward setup)
The top three sectors based on composite ranking
Explicit trade expressions and portfolio weights
Clear invalidation triggers
Upgrade to Pro to read the rest.
Become a paying subscriber to get full access to this post and our weekly subscriber-only content sent every Monday morning.
Upgrade NowUpgrading to Pro gets you:
- Complete trade setups with entries, exits, and risk levels
- Deep analysis, charts, and proprietary research
- High-conviction opportunities explained in plain English
- Early warnings on leadership shifts and cycle turns
- One avoided mistake more than pays for the subscription