📈 Market Outlook & Technicals

  • S&P 500 Industrials forward P/E stands at 26.5X, matching 2021 levels and reaching 1.24X the index, a 30-year high, signaling potential overvaluation across metrics like EV/Forward EBITDA, Price-to-Sales, and Price-to-Book. 4
  • Technicals scream volatility ahead: $BTC Weekly RSI is at an all-time low, $ETH Weekly RSI one of its lowest, while $SPY and $QQQ Weekly Bollinger Bands are the tightest in almost 10 years. Expect a breakout. 7
  • Traders are escalating hedges against software sector credit risk, evidenced by the acquisition of ~400,000 put options, equivalent to 40 million shares, on $BKLN (Invesco Senior Loan ETF) over the last 3 weeks. 8
  • The Brazilian equity market, relative to its money supply, is currently priced at levels historically associated with major bottoms, suggesting that recent volatility will eventually normalize. 10
  • Hedge funds offloaded global equities last week at the fastest clip since the April 2025 tariff turmoil. Net selling for the week ending February 19th hit a -1.54 standard deviation from typical levels, primarily driven by short sales. 12

💡 AI & Tech Sector Dynamics

  • Software is undergoing a repricing cycle, reflecting market uncertainty about viable business models a decade out. 2
  • AI’s impact on the economy echoes the 1770-1830 First Industrial Revolution, a period dubbed “Engels’ Pause,” where productivity surged 50% but real wages stagnated for 50 years due to insufficient new demand. 3
  • Anthropic is strategically expanding its Claude AI Agent with new plugins for HR, financial analysis, investment banking, equity research, private equity, and wealth management, partnering with firms like Thomson Reuters ($TRI), whose stock surged over 10% intraday. This aggressive play prompts questions about OpenAI’s competitive positioning. 5
  • $NVDA, flush with cash, is strategically investing across its supply chain and customer stack, including $INTC for x86 ecosystem exposure and foundry optionality, $CRWV for inference and cloud capacity, and $SNPS for EDA tooling. 13

⚙️ Trading & Strategy

  • The $btc Delta Threshold dictates when to hedge position deviations from neutral; frequent hedging incurs prohibitive costs that erode capital. 1
  • $HIMS found strong support today, with a Weekly RSI of 24. 9

👁️ Contrarian & Interpretive Views

  • Evidence points to potential stimulus. 6
  • Citron’s memory market report leverages historical fear against present realities; the current market is an AI-driven revaluation. Expect short-term WDC-induced volatility, but SanDisk’s sustained high-margin data center performance will ultimately crush the “reversion to the mean” short thesis. 11