Gianni Di Poce just laid out the clearest case I've seen that we are in a late cycle environment. Utilities dominated last week as the top performing sector by a wide margin, and energy has led all sectors year to date.
That combination tells you exactly where we are.
The defensive sectors are leading. The growth sectors are lagging. Ten stocks now make up 40% of the S&P 500, and the biggest names in that group are under pressure.
Microsoft has been an absolute bloodbath. The entire software sector is reeling from recent AI developments as the market prices in fears that artificial intelligence will render legacy software obsolete. Palantir is going sideways, consolidating losses.
Gianni is positioned accordingly. He is heavy in cash, short QQQ and semiconductors, and long bonds. He is not in the full blown bear camp, but he believes the correction lows are not in yet.
The signal he is watching for to flip bullish is specific. He wants to see broad based liquidation where nothing is spared, followed by tech and chips starting to drop less than the broader market. If the S&P 500 falls 2% and XLK only drops half a percent, that is when he gets interested.
There are several catalysts on the near term radar that Gianni breaks down in tonight's video:
- NVIDIA earnings arrive next week and could serve as the catalyst for a market bottom after four months of sideways price action.
- The Supreme Court may finally rule on the legality of tariffs this Friday after two or three delays.
- Crude oil is testing the $60 to $62 support zone. A break below opens a path to $55, and if that fails, $45 becomes the target.
- Bitcoin has a pathway to fall as low as $40,000 to $42,000, with support between $53,000 and $56,000.
- Ethereum may bottom before Bitcoin based on its four year cycle, which started five months earlier.
Gianni's big picture take is clear. We are setting up for the biggest buying opportunity of 2026. The key is staying patient until the weight of the evidence confirms the bottom is in.