The Weekly Signal — Sunday Edition

Markets gave back ground this week across the board. The S&P 500 closed Friday at 6,939, the Dow at 48,892, and the Nasdaq took the hardest hit, dropping nearly 1% on Friday alone to close at 23,462. The theme of the week was familiar: tech weakness dragging the broader indexes while the rest of the market held up relatively well.

Gold and silver got hammered on Friday — gold dropped over 8% to around $4,880, retreating sharply from recent highs. Silver followed suit. After months of strength, the metals took a real hit. The 10-year yield held steady around 4.24%, keeping the rate conversation mostly quiet for now.

The big story underneath the surface? Diversification is quietly working again. International stocks have been outperforming U.S. markets for about 13 months now — the largest relative move for foreign developed markets since 1993. Small and mid caps are joining the party too. For anyone who spent the last decade wondering why they owned anything besides the S&P 500, this is the vindication stretch.

No changes this week. Both strategies held their positioning steady through Friday's close.

THOR SDQ Index Rotation remains 50/50 Dow and S&P 500 with Nasdaq turned off. THOR Low Volatility Index is risk-on in 7 of 10 sectors — Materials, Energy, Industrials, Consumer Discretionary, Consumer Staples, Healthcare, and Utilities are all green. Tech, Financials, and Real Estate remain off.

The consistency here is the story. The system detected tech weakness weeks ago, rotated away, and has held that positioning while Nasdaq continues to underperform. No second-guessing, no emotional re-entry. The signal hasn't changed, so neither has the allocation. That's how systematic investing is supposed to work.

There's a rotation happening beneath the headlines that most people aren't paying attention to. While everyone debates whether AI can justify tech valuations, the market is quietly broadening out. The sectors our system flagged as risk-on — industrials, materials, energy, staples — are the parts of the economy that actually make and move things. Old economy names that everyone forgot about while chasing the Magnificent Seven.

This is what a leadership transition looks like in real time. It doesn't happen with a press release. It happens gradually, sector by sector, as capital flows shift. Our signals picked it up because they're designed to detect exactly this kind of structural change — not predict it, just recognize it once it's confirmed.

The question for 2026 isn't whether diversification is back. It's whether investors have the discipline to stick with it after a decade of being rewarded for concentration.

Behind the Ticker: Raymond Micaletti on Relative Sentiment and the MOOD ETF
Ray built an entire ETF around one insight: institutions consistently outperform retail traders, and you can measure the gap. He breaks down how he uses Commitments of Traders data and sentiment surveys to build signals across equities, bonds, commodities, and currencies — and makes a compelling case for pairing relative sentiment with trend following. Two strategies that naturally offset each other's weaknesses.
Listen on Spotify

“Is Diversification Finally Working Again?” — Ben Carlson, A Wealth of Common Sense
International stocks just posted their largest outperformance vs. U.S. stocks since 1993. Ben walks through the cycles and makes the case for geographic diversification. Timely given what we're seeing in our own sector rotation data.
Read it here

“Earnings vs. the Stock Market” — A Wealth of Common Sense
Nearly 45% of the time since 1930, earnings and stock prices have moved in opposite directions in a given year. Good reminder that the market is a discounting machine, not an earnings tracker. Short-term noise vs. long-term signal — sound familiar?
Read it here

“Why This Economic Cycle is Different” — A Wealth of Common Sense
Household balance sheets are in the best shape they've been in decades. After 2008, consumers actually deleveraged — and it's showing up in the data. Worth understanding the foundation underneath this market.
Read it here

“A Few Things I'm Pretty Sure About” — Morgan Housel, Collab Fund
Morgan's annual list of things he's convinced of. Always worth the read. Clear thinking about uncertainty, compounding, and human behavior — the stuff that actually moves markets over decades.
Read it here

“The Power of Constraints” — Ted Lamade, Collab Fund
Not finance — but completely relevant. How constraints drive creativity and performance, from sports broadcasting to business. Made me think about how our own constraint (only acting on confirmed regime changes, not predictions) is actually our biggest advantage.
Read it here

Simple. Overused. Still true. In a week where the temptation is to chase tech back down or panic about a broad selloff, the system's patience — holding steady, waiting for confirmed signals — is the entire edge.

This content reflects the opinions, analyses, and research of THOR Financial Technologies as of the date published. It is provided for informational and educational purposes only and does not constitute investment advice and should not be relied upon as the basis for any investment decision. Past performance doesn't guarantee future results, and all investments involve risk.