The Market Isn't Getting Weaker. It's Getting Wider.
Why the semis pullback is rotation, not a top — and the undervalued fast-grower I'm adding to 10X Easy Doubles this week.
Photo by Giorgio Parravicini on Unsplash
🌍 Macro
The 10-year yield is trending higher — a mild headwind. This looks like term premium and a cautious Fed, not renewed inflation fear: inflation itself is still falling. Good.
Brent oil at $72 — good. Financial conditions stay healthy.
The Fed is cautious. I expect neutral-to-slightly-tighter over the next few months, while it waits for cleaner inflation data.
What matters: it's temporary. Lower rates should follow in 6–9 months — and critically, cuts driven by cooling inflation, not a growth scare. That's the backdrop stocks need.
📊 Index
Insight: SPX 7483, fresh highs, clean Stage 2. But the thrust is broadening, not narrowing — the opposite of the late-cycle warning sign. % of stocks above 50-DMA jumped to 63, above 200-DMA to 54.55 (200-line now crossing up through 50). Net New Highs spiked to 87.78 daily / 56.62 on the 10-day.
Implication: The rally is getting wider, not thinner. Last week’s “light-volume new high” worry is resolved to the upside — more names are doing the work, not fewer. Trend healthy. Stay long.
🔄 Sectors
Insight: Leadership flipped this week. High-beta offense sold off (SPHB -3.47%, XLK -2.60%) while defensives and value led — XLF +3.54%, XLV +1.87%, XLI steady. Risk-appetite ratio still structurally bullish (SPHB/SPLV 1.93) but cracked -3.47% on the week.
Implication: Money is rotating within the bull, not exiting it. Financials + healthcare + industrials are where the fresh relative strength is. Laggards to keep avoiding: XLE (1M -7.72%), XLC (weak across the board).
🎯 Themes
Insight: Same story, sharper. Semis got hit hardest (SMH -6.28% on the week — despite +40% over 3M), AI -3.69%, Quantum -3.61%. Meanwhile the new leaders confirmed: Biotech +24.71% (1M), Airlines +18.83% (1M), Cybersecurity +2.45%, Defense +3.79%.
Implication: The barbell is clear — trim the extended semis/AI complex into strength, lean into biotech / airlines / cyber / defense on the leadership handoff. Bottom of the table (Uranium, Nuclear, Bitcoin all -20%+ over 6M) is not a dip to buy — it’s a downtrend to avoid.
🧭 Bottom Line
The bull is intact and broadening — that’s the bullish tell of the week. But it’s rotating: out of over-owned semis/AI, into value + defense + biotech. In a 4-day week, high-beta gave back and the tape barely noticed, because breadth picked up the slack.
One line for readers: Don’t confuse the semis pullback with a market top — the market’s not getting weaker, it’s getting wider. Rotate with it.
💼 10X Momentum Portfolio
My Rhythm Pharmaceuticals buy-stop was triggered, so I'm fully invested again. I reviewed and updated my stop levels (see the image below). I now hold two biotech names and three tech names — all in the green.
Fully invested, so I’m doing nothing this week.
💼 10X Easy Doubles Portfolio
As shared last week, I sold 1/3 of LQDA and 1/2 of DELL — all tracked in my shared Google Sheet. Here's the current portfolio:
ARDX is now below the -25% mark. I’ll set a stop at $4.90 — last week’s low. If it’s touched, I sell.
This week I’m adding a watchlist name with great fundamentals: undervalued, growing fast, and possibly turning the corner at last:
