The S&P 500 closed March at 6,528.52 below its 200-day simple moving average of 6,639. The index fell ~5% in March alone, capping a Q1 decline of 4.8%. It's now ~6% off the January all-time high of 6,978.

This is a level we track closely. The 200-day SMA is the most widely followed trend indicator in equity markets. A monthly close below it doesn’t happen often, and when it does, it tends to mark either the start of something worse or a washout that resolves higher.

What the Data Says: 23 Instances Since 1990

Since 1990, the S&P 500 has closed a month below its 200-day moving average for the first time in a new regime on 23 occasions. Here’s what happened next:

Nearly 4 out of 5 times, the market is higher 6 and 12 months after the first close below the 200-day. But the exceptions, September 2000, November 2007, coincided with fundamental deterioration and produced drawdowns of 26% and 43% respectively.

Rates, Oil, and the Macro Picture

The 10-year Treasury yield sits at 4.32%, holding above its most recent range of 3.95% - 4.3%.

Then there’s oil. WTI crude closed at $99 up over 70% year-to-date. Six months ago it was trading at $55. This isn’t a slow grind higher; it’s a move that’s repricing the entire energy complex and feeding directly into inflation expectations. The Energy sector (XLE) is up over 30% on the year, making it the best-performing sector by a wide margin. Oil above $100 changes the conversation. It pressures margins, complicates the Fed’s path regarding inflation, begging the question - will the fed cut rates?

The Breadth Picture: RSP and XLY:XLP

The equal-weight S&P 500 (RSP) is slightly positive on the year at almost +1%. The cap-weighted index is down 3.65%. That 4-point spread tells you the weakness is more-so concentrated in the mega-caps, not the broad market.

More importantly, RSP found support right at its 200-day moving average (189.19) during the March selloff and bounced. It’s now trading at 192.54, back above that level. When the average stock in the index is holding its long-term trend while the cap-weighted index breaks below it, the problem is at the top of the market cap spectrum, not the foundation.

The other ratio worth watching: XLY:XLP (Consumer Discretionary vs Consumer Staples). This is a classic risk appetite gauge. The ratio hit a low of 1.29 in March and held right above the May 2025 support level of 1.24. That’s a key line. When consumers are pulling back hard enough to break that ratio below its prior cycle breakout point, you’re looking at a demand-driven downturn. It didn’t break. The ratio continues to find support on that level.

Where We Stand Technically

As of April 1, the S&P 500 sits at 6,575, sandwiched between support and a tight resistance cluster:

Short-Term Trend

• 8-day EMA (6,516): Short-term trend recaptured. Constructive.

• 21-day EMA (6,611): Immediate resistance. The index is testing this from below right now.

Prior to our end of March Rally, the S&P hit 22 consecutive days closing below its 8-day moving average, giving a heavy indication we were oversold and ready for a bounce.

Intermediate Term Trend

The Momentum trend (the 21EMA and 50SMA) crossed negative in late-February and continues to decline. The S&P broke down past key support markets at $6,550 marking the October and November 2025 lows. Today’s rally regained that key level.

The Three Sectors That Can Decide This

Technology (XLK), Communication Services (XLC), and Consumer Discretionary (XLY) combine for roughly 50% of the S&P 500’s weight. They’re also the three biggest laggards this year — down 6.1%, 5.2%, and 7.9% respectively. The index doesn’t recover without them.

All three caught major support from prior 2025 consolidation. The bounces are there. What’s missing is conviction. Follow-through from these levels sustained buying, not a dead-cat bounce is what separates a correction from a trend change. If these three can build on these support lines and reclaim positive trends, the index likely follows. If they stall and roll over, defensive rotation alone likely can’t carry the market.

Small Caps: IWM Testing a Key Level

Small caps (IWM) dropped 5.8% in March and are now sitting right on their 21-day EMA at $249.59. The index briefly broke below its 200-day moving average on March 30 before bouncing back above it on April 1, a level that’s been support since November 2024.

What’s worth noting: despite the March selloff, IWM is actually still positive on the year at +1.6%. Small caps have quietly held up better than the large-cap index on a YTD basis, even though they’re 7.3% off their January highs. The IWM:SPY ratio tells the relative story. It’s currently at 0.381 near the top of the 2025 range (0.345 - 0.382).

Small caps have been gaining ground against large caps since April 2025, when the ratio bottomed at 0.345. That trend of relative outperformance is still intact despite the March pullback. The level to watch: the 200-day moving average at $241.54. IWM just tested it and bounced. If it holds, the small cap rotation thesis is alive. If it breaks, it signals a risk-off environment that goes beyond just mega-cap weakness, and that’s a different conversation entirely.

Momentum: Stock-by-Stock

Alphabet (GOOG) — $294.90, YTD -6.0%

GOOG is trading below its 50-day ($310.71) but well above its 200-day ($264.58). It’s still showing stronger relative strength than most of the mega-cap complex , which is why our model is keeping it despite the drawdown. This is the name that benefits most if the XLC bounce develops conviction.

Exxon Mobil (XOM) — $160.79, YTD +34.5%

XOM is trading 31% above its 200-day moving average, firmly in an uptrend, and riding the oil move. March was +10% while the S&P fell 5.1%. In a market struggling for direction, XOM has been a relative strength standout.

Johnson & Johnson (JNJ) — $244.12, YTD +18.6%

The defensive anchor. JNJ is trading 24% above its 200-day, above its 50-day, and near 52-week highs. In a quarter where the S&P fell 5%, JNJ delivered +18%. This negative correlation to a down trending market is exactly the type of momentum you look for.

Walmart (WMT) — $124.74, YTD +12.2%

Another defensive compounder with current negative correlation to the index. WMT is above its 200-day and has held steady through the March volatility.

The Memory Trade: MU, WDC, CIEN

Our momentum model identified names that are all deep in the memory and infrastructure buildout theme. Three of them deserve special attention:

Western Digital (WDC) — $297.73, YTD +72.9%

WDC was flat in March — while the S&P fell 5%. It’s still trading in a strong uptrend. The memory shortage isn’t a Micron-only story. WDC’s NAND and HDD business is seeing a demand renaissance driven by enterprise storage build-outs for AI training data. The magnitude of this move, nearly a double year-to-date, reflects a fundamental re-rating, not a momentum chase.

Ciena (CIEN) — $415.39, YTD +77.6%

CIEN was one of the strongest non-energy names in March, gaining almost 10% in a month where virtually everything else was down. Ciena makes the optical networking equipment that connects data centers - the physical plumbing of the AI buildout. As hyperscaler capex accelerates, the bandwidth demands between and within data centers are exploding. CIEN is the pure play on that thesis.

Micron Technology (MU) — $367.85, YTD +28.9%

Micron sits at the center of the memory trade as one of the most powerful themes in the market right now. The AI-driven shortage of high-bandwidth memory remains severe, with HBM sold out through year-end and pricing locked in. MU is trading 50% above its 200-day moving average. It pulled back quite a bit in March along with the broader tech complex, but the fundamental story hasn’t changed.

What We’re Watching in April

The immediate question is whether the S&P 500 can clear the 21 EMA / 200 SMA resistance zone at 6,610-6,640. A decisive close above that cluster would be consistent with the 78% historical base rate for recovery after a first cross below.

Beyond the index level, the signals that matter most:

• XLK, XLC, XLY follow-through. The March bounces need to develop into sustained moves above their 21-day EMAs. Without that, the index is capped.

• RSP holding the 200-day. If the equal-weight index loses its 200 SMA, the breadth picture deteriorates from “rotation” to “broad weakness.” That’s a different environment.

• XLY:XLP holding the May 2025 low. A break below 1.24 on this ratio would signal consumer risk appetite is genuinely rolling over. It held in March. It needs to keep holding.

• Oil. WTI at $99 is a tailwind for energy names but a headwind for margins and the consumer. A sustained break above $100 introduces a new variable into the inflation and earnings picture.

• The 10-year. As long as yields stay below this key 4.3% range, the rate environment is manageable. Rising rates would put additional pressure on equity valuations.

The weight of the evidence — broad market holding its 200-day, risk appetite ratios and key sectors above prior cycle lows, treasury yields stabilizing — points toward the more benign resolution. But evidence can change, and we’ll be tracking it closely through April.

Disclosures

Momentum Wealth Research LLC (“The Publisher”) is an independent publisher of financial information. The content provided herein, including the “Sword Rankings,” “Shield Report,” and hypothetical model portfolios, is for educational and informational purposes only. Momentum Wealth Research LLC and Momentum Wealth Planning, LLC (“The RIA”) are separate legal entities.

Your subscription does not create a fiduciary, client, or professional relationship with The Publisher or The RIA. All investment strategies, including the “Shield & Sword” system, involve a significant risk of loss. Past performance is no guarantee of future results. Model portfolios are purely conceptual and do not represent the performance of actual trading activity. Readers are encouraged to independently evaluate all investments and consult with a professional advisor before taking action.

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The S&P 500 just posted its first three-week losing streak in a year. It closed Friday at $6632 — less than 1% above the 200-day moving average. That headline sounds bad. But the charts underneath tell a more complex story. Some of them are flashing warning signs. Others look surprisingly healthy. And the gap between them is where the real information lives.

Chart 1: S&P 500 — The Compression Zone

$SPX at 6632.19 — sandwiched between the 50-day moving average at 6881 (resistance) and the 200-day at 6608 (support). That gap is only 25 points and narrowing. The 200-day has held every test since this bull trend began. It’s now less than 1% below Friday’s close.

Both short-term crossovers remain bearish. The 8-day EMA is below the 21. The 21-day SMA is below the 50. Momentum has shifted to the downside — rallies are being sold and lower highs are forming since the January peak. RSI sits at 34.24, approaching oversold (30) but not there yet.

The S&P is 5% below the high. All things considered, this is a surprisingly resilient market. Taking into account the headline risk, geopolitical landscape, oil rising at historic rates, yields rising - a 5% pullback is likely LESS than one would typically expect.

Chart 2: Percent of S&P 500 Above the 200-Day Moving Average

This chart strips away the index price and shows what the average stock is actually doing. Right now, roughly half the S&P 500 is trading below its own 200-day moving average.

The 50% level is the line between a market that’s correcting and one that’s deteriorating. Strong uptrends typically read 65-70%+. We peaked above 75% in late 2024 and have been grinding lower since. The decline accelerated in March as the Hormuz crisis and credit stress pulled money out of the biggest names in the index.

The names below their 200-day include Microsoft, Amazon, Meta, Tesla, JPMorgan, Netflix, Broadcom, and UnitedHealth. When your largest companies are underwater on an intermediate-term basis while the index itself is still (barely) above its own 200-day, the breadth signal is telling you the foundation is thinner than the headline suggests.

Chart 3: QQQ vs VTV — Growth vs. Value

$QQQ is down 3.16% on the year. $VTV (Vanguard Value) is up 3.31%. That’s a 6-point spread in favor of value — a reversal from the growth-dominated playbook that worked for three straight years.

Both are below their 50-day moving averages, so neither side is in a strong short-term uptrend. But $VTV is 6.5% above its 200-day while $QQQ is clinging to its own by a thread. Value isn’t just outperforming — it’s structurally healthier. The names driving it are the ones with pricing power in an inflationary environment: energy, utilities, staples, healthcare. The mega-cap tech growth names that carried $QQQ — Microsoft, Amazon, Meta, Tesla, Broadcom — are all below their 200-day averages.

If $QQQ loses its 200-day (currently $590), the rotation accelerates hard. If NVIDIA’s GTC keynote sparks a tech rally Monday, it narrows. Watch the ratio, not the individual lines.

Chart 4: Sector Relative Strength — XLE vs XLK vs XLF

This chart tells you the regime. Energy +29.05% YTD. Technology -4.98%. Financials -10.74%. That’s a 40-point gap between the top and bottom sectors.

In a normal correction, correlations rise and everything sells together. In a regime change, you get divergence — and this divergence is extreme. $XLE is above both its 50-day and 200-day moving averages, broke to new highs in March, and was the only sector green this week (+2.45%). $XLK and $XLF are both below their 50-day and 200-day — confirmed intermediate-term downtrends.

The full YTD leaderboard: $XLE +29.05%, $XLU +10.00%, $XLP +9.09% at the top. $XLF -10.74%, $XLY -7.16%, $XLK -4.98% at the bottom. Energy and defensives vs. financials and growth. The price action is telling you what kind of environment we’re in — the headlines about oil, inflation, and credit stress are the explanation for a move that the charts showed first.

Chart 5: 10-Year Yield

The 10-year yield settled at 4.28% on Friday — elevated, but notably stable given the backdrop. With oil above $98, inflation expectations grinding higher, and a war premium baked into energy, you’d expect rates to be running. They’re not. Since August 2025, the 10-year has been rangebound between 3.95% and 4.3%. As yields rise, we see that 4.3% upper resistance as the line in the sand — a sustained break above that level would signal the bond market is prioritizing inflation over recession risk, and that’s when equity multiples start to compress in a more meaningful way.

Chart 6: XLY/XLP Ratio — Consumer Health

This ratio divides Consumer Discretionary by Consumer Staples. When it’s rising, consumers are spending on wants. When it’s falling, they’re retreating to needs. It’s one of the cleanest real-time reads on consumer health in the market.

It’s down 14% year-to-date.

A falling XLY/XLP ratio doesn’t mean recession. It means the consumer is getting cautious. But sustained moves of this magnitude — 14% in 11 weeks — have historically preceded either a growth scare or an actual slowdown. The last time this ratio fell this fast was early 2025 Tariff Tantrum.

Chart 7: Sentiment — VIX and Put/Call

VIX at 27.19 — third consecutive week above 25. The SPX put/call ratio hit 1.16 on Wednesday. AAII bullish sentiment fell to 31.9%, below the 37.5% long-term average for the fourth straight week.

Fear is building, but it’s not capitulation. The readings that would give higher confidence in a contrarian bounce — VIX above 30, put/call above 1.20, AAII bulls below 25% — aren’t here yet. All three indicators are approaching their thresholds without crossing them. That’s the uncomfortable zone: bad enough to tempt bottom-fishing, not bad enough to suggest the selling is done.

Chart 8: Oil — The Variable That Connects Everything

WTI at $98.45. Brent at $102.98. Every chart above is seemingly connected to this one.

Oil is why PCE re-accelerated to 3.1% (energy pass-through). It’s why $XLE is up 29% (earnings torque). It’s why $XLY is down 7% (driving defensive rotation into staples). It’s challenging rate cuts due to expected inflation. It’s why the growth-to-value rotation is happening.

The Strait of Hormuz has been effectively closed for 15 days. Traffic down 97% since February 28. The IEA released 400 million barrels from strategic reserves — the largest coordinated release ever — and oil barely flinched. Saudi Arabia is rerouting through the East-West Pipeline but the capacity gap is roughly 12 million barrels per day.

This is the single variable that resolves the rest of the chart book. A sustained break above $100 reprices the inflation outlook, tightens financial conditions, and accelerates the stagflation rotation. A diplomatic or military resolution that brings oil back below $90 reverses the energy trade, relieves the consumer, and could trigger a relief rally. Seemingly everything else is a derivative of what happens here - the biggest question is - what is the catalyst?

Chart 9: Private Credit Stress

The private credit space continues to flash warning signs. Fund gating — where managers restrict investor redemptions — has spread beyond the initial wave, and the market is pricing it in. BlackRock (BLK) is down 13.18% YTD, but the real pain is in the pure-play alternatives: Blue Owl (OWL) has been cut nearly in half, down 40.27% YTD. That’s not a sector rotation — that’s the market repricing liquidity risk. The HYG/LQD ratio, which tracks appetite for credit risk, is essentially flat YTD, meaning investors aren’t panicking out of high yield broadly — they’re surgically punishing the corners of the market where redemption gates and mark-to-market opacity create uncertainty. This is worth watching closely: private credit stress that stays contained is a headwind; private credit stress that spills into broader high yield is a different animal entirely.

Chart 10: The Big Picture

The long-term trend on the S&P is positive. Three weeks of selling, bearish crossovers, and softening breadth — all within the context of an intact primary trend. Corrections happen within bull markets. The signal tells you the direction of the underlying trend, and that direction is still up.

What the chart book shows you is a market that isn’t breaking down — it’s repricing. Growth is selling while value holds. Consumers are pulling back while energy surges. Gold is working while bonds don’t. Private credit is gating while public credit trades normally. Small caps and equal-weight are fine while mega-caps drag the index.

That’s not crisis. It’s transition. The 200-day moving average at 656 is the line that separates the two. If it holds through this week’s catalysts, the setup for a tradeable bounce is building — oversold RSI, elevated put/call, intact trend. If it breaks, the character of the market changes.

The Week Ahead

• $SPX $6600 (200-day MA): The most important level on any chart. A close below it for the first time since the bull trend started would be the most significant technical event of the year. A bounce off it with volume is equally significant.

• FOMC dot plot (Wednesday 2:00 PM): First projections that incorporate $100 oil and Iran. Does the median dot move from one cut to zero? Powell presser at 2:30 PM frames the growth/inflation tradeoff.

• NVIDIA GTC (Monday open): If semis rally, $QQQ catches a bid and the growth/value ratio stabilizes. A flat-to-down reaction means the rotation continues.

• XLY/XLP ratio: Down 14% YTD. Stabilization = consumer scare fading. Continued decline = growth outlook is worse than priced.

• Oil — $100: WTI at $98.45. A sustained move above $100 changes the inflation calculus for everything. A break below $90 triggers the relief rally.

  ---

Disclosures

Momentum Wealth Research LLC (“The Publisher”) is an independent publisher of financial information. The content provided herein, including the “Sword Rankings,” “Shield Report,” and hypothetical model portfolios, is for educational and informational purposes only. Momentum Wealth Research LLC and Momentum Wealth Planning, LLC (“The RIA”) are separate legal entities.

Your subscription does not create a fiduciary, client, or professional relationship with The Publisher or The RIA. All investment strategies, including the “Shield & Sword” system, involve a significant risk of loss. Past performance is no guarantee of future results. Model portfolios are purely conceptual and do not represent the performance of actual trading activity. Readers are encouraged to independently evaluate all investments and consult with a professional advisor before taking action.

Please see our full Terms of Service & Privacy Policy

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The Magnificent Seven are down 5-9% year-to-date. That’s the headline. And if that’s where your analysis stops, you’d conclude the AI trade is unwinding.

But price tells a different story. While the mega-caps have lagged, a group of names further down the AI supply chain — memory, semiconductor equipment, cloud infrastructure — have been gaining superior relative strength. That’s the market telling you where the money is actually moving. The supply chain data just explains why.

The Memory Shortage Is Real

Micron’s CEO called the current AI-driven memory shortage “unprecedented.” That’s not marketing language — it’s backed by numbers. High-bandwidth memory, the specialized chips that AI accelerators require to function, is completely sold out through the end of 2026, with pricing already locked in. Revenue grew 57% year-over-year last quarter to $13.6 billion, and gross margins expanded to nearly 57%.

The shortage is so severe that it’s rippling into consumer electronics. Major smartphone makers in Asia have started trimming their 2026 shipment targets — some by as much as 20% — because they can’t secure enough memory at viable prices. AI is consuming so much of the available chip capacity that it’s creating scarcity in entirely unrelated product categories.

That’s not what a demand slowdown looks like.

Micron is responding with a $200 billion U.S. manufacturing buildout, backed in part by $6.1 billion in CHIPS Act grants. You don’t commit that kind of capital on speculative demand. You commit it when your order book is full and your customers are asking for more than you can produce.

Micron reports Q2 2026 earnings next week.

MU data by YCharts

Equipment Makers Are Printing Record Orders

If memory tells you demand is real, equipment spending tells you it’s accelerating.

ASML, which builds the lithography machines required to produce advanced chips, reported record orders of $15.8 billion last quarter — more than double Wall Street’s estimate. These machines cost upwards of $380 million each, and lead times stretch well into 2027. When customers are placing orders that far out at those price points, they’re not speculating.

Lam Research, whose etching tools are critical for manufacturing high-bandwidth memory, saw HBM-related tool revenue grow over 50% year-over-year, with management guiding for 40% growth in advanced packaging revenue for the full year. Global wafer fab equipment spending for 2026 was revised upward to a record $145 billion.

And then there’s TSMC. The foundry that manufactures chips for nearly the entire AI ecosystem reported sales 30% above last year for the first two months of 2026. More telling is the capex plan: $54 billion for the year, up from $41 billion in 2025 — a 32% increase. When the most important chipmaker in the world accelerates spending by a third in a single year, that’s the demand signal you pay attention to.

LRCX data by YCharts

Oracle Just Showed Where Phase 2 Revenue Lives

Oracle reported Q3 earnings this week that cut through the noise. Cloud infrastructure revenue jumped 84% year-over-year to $4.9 billion. Remaining performance obligations — contracted future revenue — hit $553 billion, up 325%. The company raised its fiscal 2027 revenue outlook to $90 billion.

Context matters here: Oracle was down roughly 22% year-to-date heading into the report, and carries over $124 billion in debt from its aggressive buildout. This isn’t a clean story. But the demand numbers are hard to argue with. When a company has $553 billion in contracted backlog, the question shifts from “is there demand?” to “can they execute fast enough?”

The broader point is this: 86% of enterprises increased their AI budgets this year, according to NVIDIA’s State of AI report. But only 14% of CFOs report a measurable return on those investments so far, per an RGP survey of 200 U.S. finance chiefs. That gap between spending and returns is the single most important dynamic in tech right now. It explains why the market is punishing the application-layer companies where monetization is still uncertain, while rewarding the infrastructure layer where demand shows up as contracted revenue, sold-out order books, and record equipment backlogs. The money hasn’t stopped flowing — it’s just flowing toward proof over promise.

ORCL data by YCharts

One Signal Worth Watching

Broadcom’s 8/21 EMA just crossed positive for the first time since December 2025. On its own, that’s a short-term signal in a stock that’s still below its 50-day and 200-day moving averages — so it’s early, not conclusive. But Broadcom sits at the intersection of custom AI silicon and data center networking, which makes it a useful barometer for where infrastructure spending is headed.

When a name that’s been in a sustained downtrend starts showing short-term buying interest, it’s worth paying attention — especially when the fundamental backdrop (memory shortages, record equipment orders, accelerating cloud revenue) supports the move. It doesn’t mean the bottom is in. It means the data is starting to shift.

What This Actually Means

The takeaway isn’t “buy AI infrastructure stocks.” It’s that price and momentum are already telling you where the market is headed — the revenue data just explains why.

Memory chips, equipment makers, and cloud infrastructure names have been gaining relative strength for months. That’s the signal. The sold-out order books, the record equipment spending, the 84% cloud revenue growth — that’s the explanation. Price moves first. The story catches up.

The lesson is the same one it always is: follow what the market is actually doing, not what the headlines say it should be doing. The Mag 7 dominated the narrative for three years, and now momentum is rotating away from them. You didn’t need to predict that — you just needed to track where relative strength was shifting and let the data lead.

The signal is in the price. The story is in the supply chain. And right now, they’re pointing in the same direction.

What History Says About Oil Shocks and Stocks

This is not the first time oil has spiked on a geopolitical crisis. Three modern parallels give us a framework:

1990 — Gulf War

Iraq invaded Kuwait on August 2, 1990. Oil roughly doubled from $17 to $36/barrel in three months as markets priced in a prolonged Middle East conflict. The S&P 500 fell 19.9% from its July peak to its October low — just short of a technical bear market. The U.S. entered a mild recession that lasted eight months.

Then it reversed. When Desert Storm launched in January 1991, the conflict ended in six weeks. Oil crashed 33% in a single day and fell back below $20 by March. The Dow rallied 17% in four weeks. The S&P 500 hit new all-time highs by February 1991 — less than four months after the bottom.

2008 — The $147 Barrel

Oil surged from $95 to $147 between January and July 2008 — a 55% spike driven by surging global demand and supply fears. But this shock didn't happen in isolation. It coincided with the unraveling housing market and a seizing financial system.

Here's the part most people forget: after peaking at $147 in July, oil collapsed to $32 by December — a 78% crash in five months. Economic activity cratered so fast that oil demand collapsed with it — overwhelming any supply story. When the real economy breaks, commodities follow it down.

2022 — Russia/Ukraine

Russia's invasion of Ukraine on February 24, 2022 sent oil from $76 to $130 in about two weeks — a 71% spike. But unlike 1990, the oil shock didn't resolve quickly. And unlike 2008, the economy wasn't breaking under its own weight. The dominant driver was the Fed's aggressive rate-hiking cycle — the oil shock amplified an already severe inflation problem (CPI was already at 7.9% before the invasion), forcing even more tightening.

Oil eventually rolled over, falling back to $75 by late 2022 as recession fears grew and Russian oil found new buyers through India and China. But the damage was done — the S&P 500 fell 25.4% from January to October 2022, a drawn-out 10-month decline with no clean resolution point like 1991. The recovery took months, not weeks.

The pattern: Oil shocks alone don't cause market crashes. The severity depends on what else is broken. In 1990, the economy was already weakening. In 2008, the financial system was failing. In 2022, the Fed was tightening into elevated inflation. A pure oil shock with a healthy financial system tends to produce a correction, not a crash.

The uncomfortable question for 2026: is something else broken?

The Inflation Problem

Energy makes up roughly 7-8% of the CPI basket. But the impact of an oil shock goes far beyond the gas pump.

The direct hit: A $10/barrel increase in crude oil translates to roughly $0.25/gallon at the pump within 2-6 weeks. The current $23/barrel spike means gas prices are likely headed about $0.55-0.60/gallon higher in the coming weeks, all else equal.

The indirect hit: Oil is an input cost for virtually everything. Agriculture runs on diesel and natural gas-derived fertilizer. Manufacturing runs on electricity and petrochemicals. Logistics runs on diesel. Federal Reserve research shows the indirect effects can roughly double the total CPI impact over 3-12 months.

The math: A sustained $20+ increase in oil prices typically adds 0.4 to 1.0 percentage points to annualized headline CPI. Analysts at Wolfe Research have estimated the impact at roughly 0.4 percentage points on headline CPI and a 0.1% drag on GDP for every $20/barrel move in crude.

This matters because CPI was at 2.4% before the oil shock. If oil stays near $90, headline inflation is headed higher — possibly back above 3% — right when the Fed thought the disinflation trend was intact.

The Fed's Choice

February payrolls came in at -92,000 — deeply negative against expectations of a modest gain. Unemployment rose to 4.4%, and prior months were revised lower by a combined 69,000.

Now add an oil-driven inflation shock on top of that.

Rising prices alongside falling employment — that's the stagflation scenario the market has been dreading. It leaves the Fed with no good options.

Cutting rates to support a softening labor market risks stoking the inflationary pressure that oil is already creating.

The Fed meets March 17-18. No rate change is expected, but the statement and press conference will signal how they're thinking about this tradeoff.

Before that meeting, we get February CPI on March 11 and PPI on March 18. These reports will mostly capture data from before the oil spike — but they'll set the baseline. If inflation is already running hot before oil flows through, the Fed has less room to maneuver.

Winners and Losers

The sector rotation this week was dramatic:

SECTORRETURN SINCE CONFLICT START (FEB 27)

Energy  +1.16%

Comms  -0.50% 

Tech-1.06% 

Financials-1.67% 

Discretionary-2.07% 

Utilities-2.07%

Real Estate -2.17% 

Industrials-4.06% 

Health Care-4.68%

Staples -4.70% 

Materials-6.65%

The Bottom Line

Oil surged 35% in a single week — the biggest move in 43 years of futures trading. The Strait of Hormuz is effectively closed. The U.S. economy just posted its worst jobs report since the pandemic. And inflation is about to get worse before it gets better.

History says the severity of an oil shock depends on what else is broken. Right now, the labor market is weakening, the Fed is boxed in, and there's no clear timeline for the Hormuz situation to resolve.  If it lasts longer, $100+ oil and increased risk become more real.

Panic selling into a geopolitical shock has historically been the wrong move. But so has ignoring it. The right approach: understand what you own, know your exposure, and let the trend guide your next step. CPI on Tuesday and the Fed on Wednesday will tell us a lot about where this goes next.

We'll continue tracking this in the weekly commentary.

The S&P 500 has turned negative on the year. After five months of coiling between 6,800 and 7,000, the index decisively failed at 6,900 resistance and is now trading around 6,735 — below both its 50-day and 100-day moving averages for the first time since the April 2025 tariff shock. The all-time high of 7,002 (January 28) feels like a long time ago.

What changed? Three things hit simultaneously:

• The Iran conflict — Joint US-Israeli strikes beginning February 28 effectively shut down the Strait of Hormuz. Brent crude broke above $90/bbl, up 26% in a week. The Strait handles ~20% of global oil supply. Insurance providers have pulled war-risk coverage for tanker transit — meaning commercial shipping can’t pass through even if it wanted to.

• A shocking jobs report — February payrolls printed -92,000 (vs. +50,000 expected). Third negative print in five months. Unemployment ticked up to 4.4%. December was revised down by 65,000. Average unemployment duration hit 25.7 weeks — the longest since December 2021.

• Sticky inflation + a boxed-in Fed — CPI at 2.4%, with the Fed’s preferred PCE gauge still near 3%. 10-year yields surging above 4.17%. The Fed is trapped: the labor market is weakening, but oil-driven inflation pressures are building. Rate cuts feel off the table. The January FOMC minutes even floated the possibility of raising rates. The word “stagflation” is back in circulation.

Short-Term Trend: 8 EMA / 21 EMA — Bearish

The short-term picture is clearly bearish. With the S&P 500 dropping from 6,900 to 6,735 in under two weeks, the 8-day EMA has crossed below the 21-day EMA — a short-term sell signal. Price action has been one-directional: lower highs, lower lows. The February chop saw seven crossings of the 50-day SMA alone — but this latest move has conviction behind it.

For those using the 8/21 EMA crossover as a tactical timing tool: the signal flipped bearish in late February and hasn’t looked back.

Intermediate-Term Trend: 21 EMA / 50 SMA — Bearish

The intermediate picture is where things get interesting. The S&P 500 broke below its 50-day SMA (~6,863) on February 27 and hasn’t reclaimed it. It then broke below the 100-day (~6,835) on March 5. The 21-day EMA has rolled over and crossed below the 50-day SMA — confirming the intermediate trend has turned bearish.

This is the transition zone. With the 21 EMA now below the 50 SMA, the intermediate trend has joined the short-term in bearish territory. The only thing left holding is the long-term 200-day.

The 200-Day: Line in the Sand

The 200-day SMA sits around 6,580-6,612. That’s roughly 2% below current levels. As long as the S&P holds above it, the long-term uptrend remains technically intact.

Key support levels to watch on the way down:

• 6,800 — critical near-term support, “risk-off” trigger

• 6,580 — 200-day SMA, the big one

The Great Rotation: Bits to Atoms

The biggest story of 2026 isn’t the Iran war or the jobs miss — it’s the sector rotation that was already underway before either happened.

Returns since the October 29 market high:

Sector Returns Since Oct 29 High

Energy +30%

Materials +17.5%

Staples +13%

Industrials +12%

Real Estate +8.4%

Health Care +8%

Utilities +5.5%

Communications +2.8%

Financials -0.7%

Discretionary -1.75%

Technology -7.08%

Capital is flowing from software multiples into tangible assets — oil, defense, metals, infrastructure. The Iran conflict poured gasoline on a fire that was already burning.

Yields & The Bond Market: No Safe Haven

The 10-year Treasury yield surged above 4.17% this week — its highest level since mid-February — and the move tells you everything about where this market’s head is at.

In a normal geopolitical crisis, bonds rally. Investors flee to safety, yields drop. That’s not happening. Instead, yields are rising into a war because the inflationary implications of $90 oil are overpowering the flight-to-quality instinct.

• 10-Year Yield: 4.17%, up sharply from below 4.00% in late February

• 2-10 Spread: Widened to 57 basis points — the curve is steepening, signaling rising inflation expectations

• Rate cut expectations: Markets now pricing one to two 25bp cuts for 2026, with July as the earliest likely window

The bond market is telling you it doesn’t think the Fed can rescue this.

Volatility and Sentiment

VIX: 23-28 range. Elevated, rising, but not panicked. A push toward 30 is possible if the 200-day SMA breaks.

Breadth: Deteriorating. Only 56% of S&P 500 stocks above their 200-day MA. The advance/decline line is trending down even as the index stays relatively close to highs. Narrow leadership is a warning sign.

• The Monthly Red Line Signal | Risk Status

• Breakdown of the long-term trend

• Breakdown of momentum

• The Hypothetical Model Portfolio settings for February.

• Full March Stock Rankings

  ---

🛡️The March Signal

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🟢 Positive Trend

🟡Weak Momentum

The signals are favorable. The market the long-term trend is positive, however momentum is fading. The conflict with Iran is heightening market volatility.

🛡️The Red Line | Long-Term Trend Review

We define risk using one primary metric: The Red Line (the 200-day moving average).

• The Signal:

  • If the price is Above the Red Line, we play offense.

  • If it falls Below the Red Line, we play defense.

• The Verdict:

  • Both the S&P 500 (SPY) and the Nasdaq 100 (QQQ) are currently trading Above the Red Line ✅.

S&P 500 $SPX

Above the Red Line ✅

Nasdaq 100 $NDX

Above the Red Line ✅

🛡️Momentum Trend Review (The Speedometer)

Think of this as the “speed” of the market. It measures the strength behind the price.

• We track a faster-moving moving averages to track the market momentum.

• Positive Momentum: When the Gray Line is above the Blue Line, the market has positive momentum.

• Neutral/Lagging Momentum: When the Gray Line is below the Blue Line, the market has negative / neutral momentum.

S&P 500 $SPX

Negative❌

Nasdaq 100 $NDX

Negative ❌

⚔️The March Rankings

1. Google (GOOG)

Rank: #1 Sector: Technology / Communications

2. Micron (MU)

Rank: #2 Sector: Technology / Semiconductors

3. Johnson & Johnson (JNJ)

Rank: #3 Sector: Healthcare

4. Eli Lilly (LLY)

Rank: #4 Sector: Healthcare

5. Lam Research (LRCX)

Rank: #5 Sector: Technology / Semiconductor Equipment

🛡️⚔️The Shield and Sword Hypothetical Model

The following section is reserved for paid subscribers of Momentum Wealth Research.

Investors are trained to seek predictions. What you should really seek is a process.

Upgrade to access the full Sword Process—the comprehensive framework integrating the hypothetical Model Portfolio (centerpiece), Momentum Rankings, and Roundtable insights.

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Trend: 🟢 Positive

Momentum: 🟡Fading

Current Model Hypothetical Positioning

How the Model Works - Examples:

The Positive Environment 🟢

At the end of each month, if the price is Above the Red Line, the system is on offense.

• The Shield: Hypothetically allocates ~70% to ~85% to broad equity indexes (like the S&P 500) to capture the primary trend.

• The Sword: Hypothetically allocates ~15% to ~30% to the Momentum Stocks or high-strength sectors / thematic funds in attempt to capture current leadership.

The Negative Environment (Shield is Red 🔴)

At the end of each month, if the price breaks Below the Red Line, the system moves to defense.

• The Shield (Risk Management): Hypothetically allocates as low as 0% to equities and as high as 100% to risk-off assets like cash, money markets, or short-term Treasuries.

• The Sword: Hypothetically allocates as low as 0% to momentum stocks, moving the entire portion to ‘risk-off’ alongside the Shield.

Stay tuned for the new Sword Rankings update this weekend - some positive changes coming up.

-Your friends at Momentum Wealth Research

Disclosures

Momentum Wealth Research LLC (“The Publisher”) is an independent publisher of financial information. All content provided is for informational and educational purposes only and does not constitute personalized or specific investment advice. Momentum Wealth Research LLC is an affiliate of Momentum Wealth Planning, LLC (“The RIA”) and are separate legal entities.

Your subscription does not create a fiduciary, client, or professional relationship with The Publisher or The RIA. All investment strategies, including the “Shield & Sword” system, involve a significant risk of loss. Past performance is no guarantee of future results. Model portfolios are purely conceptual and do not represent the performance of actual trading activity. Readers are encouraged to independently evaluate all investments and consult with a professional advisor before taking action.

Please see our full Terms of Service & Privacy Policy

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🛡️The February Weekly Update

In this week's Shield Report, paid subscribers get:

• - The complete Red Line analysis with annotated charts

• - Momentum trend update and what it means for positioning

• - Model portfolio allocation for the current market environment

• - Will the S&P Momentum Trend turn negative?

• - What to watch for in the week ahead. Clear signals. No guesswork.

The February Signal

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Read more

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For a full archive of past signals and rankings, click below

💡 Why Momentum Matters

Our M5 algorithm identifies stocks with institutional-quality momentum characteristics.

Not hot tips. Not hunches. Systematic rankings based on:

• Absolute Momentum - Multi-timeframe price analysis

• Risk-Adjustment - Incorporates T-Bill rates and volatility

• Quality Filtering - Market cap and institutional liquidity

The result? A monthly ranked list of stocks showing the strongest risk-adjusted momentum.

📊 February's Rankings

This month's top 6 includes:

1. A tech giant that slid after blowout earnings (buying opportunity?)

2. A memory chip maker benefiting from the shortage

3. A healthcare stock trading like an AI stock

One previous favorite got removed—momentum failed, algorithm kicked it out.

In this month's update, paid subscribers get:

• All 6 ranked stocks with momentum scores

• Annotated charts for each position

• Why stocks made or missed the list

• What we're watching for March

The algorithm does the work. You get the rankings.

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Here’s the Top Six

Read more

🛡️The February Weekly Update

In this week's Shield Report, paid subscribers get:

• - The complete Red Line analysis with annotated charts

• - Momentum trend update and what it means for positioning

• -Overview of the rotation out of Big-Tech into Value

• - What is driving (and dragging) this market.

• - Model portfolio allocation for the current market environment

• - What to watch for in the week ahead. Clear signals. No guesswork.

The February Signal

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Read more

Most investors think market crashes happen overnight. They don’t.

The reality? Major declines follow a predictable pattern—what we call “The Anatomy of a Collapse.”

It’s simple:

1. The trend breaks

2. Price dips below the Red Line

3. The bulk of the decline occurs BELOW the Red Line

Historically, the trend precedes stock market crashes.

Let’s look at every major decline in history to see if this holds true.

The Great Depression 1929 - 1932

The Decline | -85%+ from peak to trough - the worst in history

The Timeline | Almost 3 years

Notice how this crisis doesn’t happen in days or weeks—it unfolds over years.

The Red Line crossed negative in November 1929. The majority of the decline occurred AFTER that signal.

A ‘passive investor’ willingly chooses to bleed through these declines... but a recession of this degree will ‘never happen again,’ right?

The WWII Decline 1937 - 1943

The Decline | -60% over 5 years

Often overshadowed by the Great Depression, but still one of the most devasting declines in history.

Again, look at the Red Line as a measure of hypothetical entry and exit points. Is it perfect? Of course not. But the fact stands - Historically, the trend precedes the large part of the decline.

Both of these declines occurred back-to-back. It would have taken the ‘passive investor’ 25 years just to break even (1929-1954).

The 70’s Disaster

The Result: Net 0% return over 6 years

Two Major Declines:

• 1969-1970: -35%

• 1973-1975: -45%

Between monetary policy, stagflation, and the oil crisis, it was a decade of booms and busts that led nowhere.

Could trend-following have helped navigate these declines? Historical data suggests yes.

Why? Historically, trend breaks have preceded stock market crashes.

1987 ‘Black Monday’

The Decline: ~33% total, ~28% occurred in just 5 days

In fairness, the Red Line didn’t help much here—the crash was too quick.

The difference between a ‘Crash’ and a ‘Decline’ is the speed at which it occurs.

Black Monday was a true crash. Most bear markets are declines—slow, grinding, painful.

2000’s Dot.com Bubble

The Decline: -40%+ over nearly 3 years

Do we sound like a broken record yet?

Practically all of the decline occurred below the Red Line.

2008 Financial Crisis

The Decline: -50%+ in less than 2 years

The most devastating decline since the WWII Downturn.

Almost 20 years ago but feels like yesterday for a lot of people.

Just take a look at that Red Line.

The Anatomy of a Collapse.

2020 COVID Crash

The Decline: -34% in 3 weeks

Look at the COVID Crisis. Reducing risk at the Red Line could have helped you avoid a big chunk of that 34% decline.

Now look at May 2020 when the price came back ABOVE the Red Line.

Were you optimistic on the outlook of the economy in May 2020? Of course not.

But the Red Line signal turned positive.

2022 Rate Hike Cycle & Inflation

The Decline: -27% from January to October 2022

The Red Line endured a 10% decline in January, a brief fake-out in April, and proceeded to miss the bulk of the decline.

The passive investor? Down 27% and white knuckling through every headline about inflation.

2023 The Recession that Never Came

Just kidding.

While headlines screamed ‘RECESSION,’ the S&P rose 26%.

This illustrates the value of objective signals over subjective news headlines.

The Pattern is Clear

Across nearly 100 years of market history, the same pattern typically repeats:

1. ✅ Trend breaks

2. ✅ Price crosses below the Red Line

3. ✅ The majority of the decline happens BELOW the Red Line

This isn’t hindsight bias. This is a basic, time-tested indicator in technical analysis.

The 200-day moving average has been used by institutions for decades precisely because, a lot of the time, it works.

The Passive Investor’s Choice

You have two options:

Option 1: Hope

• Hope the next crash won’t be as bad

• Hope you can stomach a -50% decline

• Hope you don’t panic and sell at the bottom

• Hope it recovers quickly

Option 2: A Plan

• Use objective signals to manage risk

• Step aside when the trend breaks

• Re-enter when the trend recovers

• Remove emotion from the equation

  ---

What This Means for You

Understanding the anatomy of a collapse doesn’t mean you can predict the future.

It means you can have a plan for managing it.

The Red Line isn’t magic. It’s a simple, objective measure of trend. When the majority of stocks are in uptrends, the Red Line acts as support. When they’re not, it becomes resistance.

And historically—across every major decline in the last century—the bulk of the damage happens below that line.

Want to see how we apply this in real-time?

Our paid Shield & Sword research provides:

• ✅ Monthly Red Line signal (positive or negative)

• ✅ Weekly trend updates

• ✅ Market regime analysis (momentum, breadth, rotation)

• ✅ Top 5 momentum stocks when signals are positive

• ✅ Hypothetical model portfolio framework

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Questions or thoughts? Drop them in the comments below.

Disclosures

Momentum Wealth Research LLC (“The Publisher”) is an independent publisher of financial information. The content provided herein, including the “Sword Rankings,” “Shield Report,” and hypothetical model portfolios, is for educational and informational purposes only. Momentum Wealth Research LLC and Momentum Wealth Planning, LLC (“The RIA”) are separate legal entities.

Your subscription does not create a fiduciary, client, or professional relationship with The Publisher or The RIA. All investment strategies, including the “Shield & Sword” system, involve a significant risk of loss. Past performance is no guarantee of future results. Model portfolios are purely conceptual and do not represent the performance of actual trading activity. Readers are encouraged to independently evaluate all investments and consult with a professional advisor before taking action.

Please see our full Terms of Service & Privacy Policy

Terms of Service | Privacy Policy

To read our full disclaimer, click here

For a full archive of past signals and rankings, click below

⚔️ The Sword Process

How can you take advantage of momentum in positive markets?

Our process includes:

• Momentum Stock Rankings: Monthly algorithm-driven selection of 5 top stocks with the highest relative strength.

• Hypothetical Model Portfolio: Hypothetical trend-based model illustrating how signals could be applied.

The Momentum Algorithm: Our Three Step Process

• 1. Absolute Momentum: Analysis of U.S. large-cap stocks using multi-time frame price momentum to identify established uptrends.

• 2. Risk-Adjustment: Adjustment for risk, incorporating T-Bill rates (risk-free) and volatility (standard deviation).

• 3. Quality-Adjustment: Standardizes the data to create an apples-to-apples comparison and filtered for market cap to ensure liquidity and institutional quality.

The 5 stocks with the highest final momentum scores form the core rankings input to the Sword Process.

⚔️ Momentum Stock Weekly Update

Five SIX names are currently represented in our Momentum Stock Rankings.

February Signal Recap:

• 2 New Entries: The algorithm triggered two hot new leadership companies for February contributing to the AI space.

• 4 Keepers: Maintained leadership status - includes 1 healthcare company that continues to take off.

• 1 Exit: The algorithm removed a tech giant (a previous favorite) due to failed momentum.

Here’s the Top five Six

Read more

We are grateful for your support and engagement with Momentum Wealth Research. To sustain the depth and quality of our institutional-grade research—including the monthly Shield & Sword updates, Red Line signal, and momentum rankings—we are transitioning to a fully paid subscription model effective immediately.

As a token of our appreciation for your loyalty as a current subscriber, we are pleased to offer you an exclusive 50% discount.

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Thank you for being part of our community. We remain committed to delivering objective, trend-following insights to help you navigate markets with clarity and confidence.

Now, onto this month’s Shield Update…

🛡️The February Weekly Update

• The Monthly Red Line Signal | Risk Status

• Synopsis of the long-term trend

• Synopsis of Momentum

• Overview of Market Rotation, lagging growth, leading value

• The Hypothetical Model Portfolio settings for February.

Moving Beyond “Passive” to a Risk-Management Plan

Most investors buy a broad index fund(s) and just hope for the best. But markets don’t work like this. Historical drawdowns of -20% to -50% aren’t uncommon, and it can often take 2 to 10 years just to get back to even when this happens.

For a passive investor, that’s a decade of lost time. For us, that is a risk we refuse to take without a plan.

The Shield is the plan in attempt to combat this. It tells you when the trend favors growth and, more importantly, when it’s time to manage risk.

To read our full disclaimer, click here

The February Signal

Read more

To read our full disclaimer, click here

For a full archive of past signals and rankings, click below

⚔️ The Sword Process

With the current Shield signal positive (price above the Red Line), the paid Sword Process activates—providing the systematic research framework to capitalize on momentum in offensive regimes.

This integrated process includes:

• Momentum Rankings: Monthly algorithm-driven selection of leaders.

• Hypothetical Model Portfolio: Hypothetical trend-based model illustrating how signals could be applied.

• Roundtable Video (Upcoming): Monthly executive briefing for deeper conceptual insights.

The Momentum Algorithm: Our Three Step Process

• 1. Absolute Momentum: Analysis of U.S. large-cap stocks using 6- and 12-month price momentum to identify established uptrends.

• 2. Risk-Adjustment: Adjustment for risk, incorporating T-Bill rates (risk-free) and volatility (standard deviation).

• 3. Quality-Adjustment: Standardizes the data to create an apples-to-apples comparison and filtered for market cap to ensure liquidity and institutional quality.

The stocks with the highest final momentum scores form the core rankings input to the Sword Process.

⚔️ THE NEW February Rankings

These five SIX names represent the current Sword Rankings.

• 2 New Entries: The algorithm triggered two new leadership signals.

• 1 Exit: Former leader removed due to fading momentum.

• 4 Keepers: Maintained status.

Get 25% off for 1 year

Hypothetical Model Portfolio Integration

This model is purely conceptual and educational—illustrating potential application of the Sword Process in a positive regime (not actual trading or advice).

Example Allocation Framework:

This model and Sword Ranking is for illustrative purposes only. Not financial advice. See full disclosures.

1. Google (GOOG)

Rank: #1 Sector: Technology / Communications

Notes: Google has been a clear leader in the past few months. A series of higher highs and higher lows, proving a strong technical uptrend. Google reports earnings this coming week. If the trend is any indicator of things to come, we are looking for a positive report to coincide with this trend.

2. Micron (MU)

Rank: #2 Sector: Semiconductors / Memory

Notes: Memory stocks have been dominating this market - as is reflected in our rankings with the addition of and .

3. Johnson & Johnson

Rank: #3 Sector: Healthcare

Notes: trading like a growth stock. Series of higher highs → pullback of higher lows. We’ve reached the top of the green envelope this week, may see a pullback down to the 21-day EMA as we’ve seen in the past.

4. Lam Research (LRCX)

Rank: #4 Sector: Semiconductors / Memory

Notes: Lam, like Micron, looks like a bullet train. Volatile, but a bullet train.

T5. Eli Lilly (LLY)

Rank: #5 Sector: Healthcare

Notes: Lilly consolidating within a range. Holding $1,000 support, looks like it could be primed to break through $1,100 resistance to resume the uptrend. Earnings report coming up this week, keep an eye out.

T5. Apple (AAPL)

Rank: #5 Sector: Technology

Notes: Apple just barely missed the cut for the top 5 by month end. However, Today’s breakout would have kept it in the #1 spot, so, we are keeping it in tied at the #5 spot. Because This. Looks. Good.

See you next week for the Shield Report update.

Disclosures

Momentum Wealth Research LLC (“The Publisher”) is an independent publisher of financial information. The content provided herein, including the “Sword Rankings,” “Shield Report,” and hypothetical model portfolios, is for educational and informational purposes only. Momentum Wealth Research LLC and Momentum Wealth Planning, LLC (“The RIA”) are separate legal entities.

Your subscription does not create a fiduciary, client, or professional relationship with The Publisher or The RIA. All investment strategies, including the “Shield & Sword” system, involve a significant risk of loss. Past performance is no guarantee of future results. Model portfolios are purely conceptual and do not represent the performance of actual trading activity. Readers are encouraged to independently evaluate all investments and consult with a professional advisor before taking action.

Please see our full Terms of Service & Privacy Policy

Terms of Service | Privacy Policy

• The Monthly Red Line Signal | Risk Status

• Breakdown of the long-term trend

• Breakdown of momentum

• The Hypothetical Model Portfolio settings for February.

Moving Beyond “Passive” to a Risk-Management Plan

Most investors buy a broad index fund(s) and just hope for the best. But markets don’t work like this. Historical drawdowns of -20% to -50% aren’t uncommon, and it can often take 2 to 10 years just to get back to even when this happens.

For a passive investor, that’s a decade of lost time. For us, that is a risk we refuse to take without a plan.

The Shield is the plan in attempt to combat this. It tells you when the trend favors growth and, more importantly, when it’s time to manage risk.

To read our full disclaimer, click here

Current Market Status: 🟢 Positive

The signals are favorable. The market trend is pointing up, making this a high-probability environment to be invested.

The Month-End Shield signal is the primary signal that we use to dictate our Hypothetical Model Portfolio

Paid members can access this below to see actionable ideas on how you could invest with the trend.

Not a paid subscriber yet? Start your Free Trial

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🧠Cutting Through the "Noise"

We ignore the headlines and focus on the trend. This week, the media focused on:

• The US Dollar falling

• A new Federal Reserve Chairman Nominee

• Silver & Gold Rush

• AI Capex Concerns

Yet the trend was positive throughout January and stocks closed higher!

The Takeaway: If the headlines scare you, turn off the TV and look at the Red Line.

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🛡️The Red Line | Long-Term Trend Review

We define risk using one primary metric: The Red Line (the 200-day moving average).

• The Signal: If the price is Above the Red Line, we play offense. If it falls Below the Red Line, we play defense.

• The Verdict: Both the S&P 500 (SPY) and the Nasdaq 100 (QQQ) are currently trading Above the Red Line ✅.

S&P 500

Above the Red Line ✅

Nasdaq 100

Above the Red Line ✅

🛡️Momentum Trend Review (The Speedometer)

Think of this as the “speed” of the market. It measures the strength behind the price.

• We track a faster-moving moving averages to track the market momentum.

• Positive Momentum: When the Gray Line is above the Blue Line, the market has positive momentum.

• Neutral/Lagging Momentum: When the Gray Line is below the Blue Line, the market has negative / neutral momentum.

S&P 500

Positive ✅

Advanced analysis: On Wednesday, the S&P 500 Index broke above all-time highs reaching the $7,000 mark. While it closed below these levels, we are still above the October 2025 high, which we would like to see become short-term support.

All that said, the past 2 weeks brought their fair share of headlines and geopolitical events - Greenland, Tariffs, Japan Government Bonds, Iran, etc. yet the market still managed to make new highs. Be prudent. Follow the trends, not the headlines.

Nasdaq 100

Positive ✅

Advanced analysis: A more thematic analysis this month for the Nasdaq 100 the story of Tech vs. the broad market. Historically, our market leaders are found in the tech heavy QQQ, however it has been in a lull since the Nov. 2025 pullback. This past week, we had big earnings from , , , and . These four giants make up ~17% of the Nasdaq 100.

Despite a mixed bag of said mega-cap earnings, the QQQ is above the red line with a positive momentum trend, indicating the broader market is making up for the few Mega-Cap laggards.

🛡️⚔️The Shield and Sword Hypothetical Model

The following section is reserved for paid subscribers of Momentum Wealth Research.

Investors are trained to seek predictions. What you should really seek is a process.

Upgrade to access the full Sword Process—the comprehensive framework integrating the hypothetical Model Portfolio (centerpiece), Momentum Rankings, and Roundtable insights.

Get 7 day free trial

Trend: 🟢 Positive

Momentum: 🟢Positive

Current Model Hypothetical Positioning

How the Model Works - Examples:

The Positive Environment 🟢

At the end of each month, if the price is Above the Red Line, the system is on offense.

• The Shield: Hypothetically allocates ~70% to ~85% to broad equity indexes (like the S&P 500) to capture the primary trend.

• The Sword: Hypothetically allocates ~15% to ~30% to the Momentum Stocks or high-strength sectors / thematic funds in attempt to capture current leadership.

The Negative Environment (Shield is Red 🔴)

At the end of each month, if the price breaks Below the Red Line, the system moves to defense.

• The Shield (Risk Management): Hypothetically allocates as low as 0% to equities and as high as 100% to risk-off assets like cash, money markets, or short-term Treasuries.

• The Sword: Hypothetically allocates as low as 0% to momentum stocks, moving the entire portion to ‘risk-off’ alongside the Shield.

See the current Sword Rankings here: The Sword | Momentum Wealth Research | Substack

Extras

Semiconductors (primarily memory) continue to look extremely strong.

Memory names and likely to be added to the Sword Stocks - stay tuned for the Sword Rankings this weekend.

Energy making new 2-year highs as oil prices rise. is on watch to join the Sword rankings as well.

Stay tuned for the new Sword Rankings update this weekend - some positive changes coming up.

-Your friends at Momentum Wealth Research

Disclosures

Momentum Wealth Research LLC (“The Publisher”) is an independent publisher of financial information. All content provided is for informational and educational purposes only and does not constitute personalized or specific investment advice. Momentum Wealth Research LLC is an affiliate of Momentum Wealth Planning, LLC (“The RIA”) and are separate legal entities.

Your subscription does not create a fiduciary, client, or professional relationship with The Publisher or The RIA. All investment strategies, including the “Shield & Sword” system, involve a significant risk of loss. Past performance is no guarantee of future results. Model portfolios are purely conceptual and do not represent the performance of actual trading activity. Readers are encouraged to independently evaluate all investments and consult with a professional advisor before taking action.

Please see our full Terms of Service & Privacy Policy

Terms of Service | Privacy Policy

To read our full disclaimer, click here

“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” - Mark Twain

The Top 10% Reality

Diversification is the only ‘free lunch’, right?…

A landmark study by J.P. Morgan Asset Management seems to say differently:

• The 66% Drag: Two-thirds (66%) of all stocks in the Russell 3000 between 1980 and 2021 actually delivered negative relative returns compared to the index.

• The Absolute Failure: Over 40% of individual stocks experienced negative absolute returns over that same period—meaning they simply lost money.

• The 10% Solution: The majority of net wealth creation in the market is driven by a tiny minority (~10%) of “megawinners.”

The Sword is our systematic filter designed in attempt to find these ‘Megawinners’. Each month, our algorithm analyzes the market for the top five names exhibiting the highest relative strength and institutional quality. When The Shield is Green, we focus here to capture the "Momentum Factor".

⚔️ January Intra-Month Review

• The Strategy: The next Sword Ranking release (February 2), our Sword Algorithm will trigger a rebalance in attempt capture top tier momentum.

  • The Leaders: Three of our current M5 rankings have continued strong momentum from (as of now) and are likely to remain in the top 5 for February.

  • The Laggards: Two names have been flagged by the system for a potential exit on February 1. Time will tell.

⚔️ The Top 5 Leaders (January)

These five names represent the current Sword Rankings.

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Weekly Market Monitor & Risk Analysis

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The Bottom Line

Most investors buy an index fund and hope for the best. The Shield is a systematic addition to that strategy, designed to signal when the trend favors growth and when it's time to defend.

Addressing the Noise: This Week’s Context

We include these events only to address the “fear & greed” that dominates the financial media. While these are notable, they are secondary to the trend:

• Japan Government Bonds: Japan’s rising interest rates are causing bond market volatility.

• Greenland: Geopolitical tension has increased following the proposed 10%–25% escalating tariff on European countries.

• The Credit Card Cap: A proposed 10% cap on credit card interest rates is creating localized pressure on the financial sector.

Signal Over Noise

Our system is built on the reality that the “noise” of news headlines and geopolitics is a distraction. While headlines explain why the market moved yesterday, the Trend tells you how to manage risk today.

In this system, the trend isn’t just a guide—it is the primary purpose. The only objective way to manage risk and remove emotion from your portfolio is to stay on the right side of the Trend.

We don’t manage news; we manage risk through the trend.

If the headlines scare you, turn off the television and look at the trend.

Current Market Status:

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• They hope it won't happen.

• They hope they can stomach it.

• They hope it recovers quickly.

But hope isn't a strategy.

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The Shield & Sword System

We provide two frameworks:

🛡️ The Shield - Know when to reduce risk

⚔️ The Sword - Know where the momentum lives

Step 1: 🛡️The Shield: Your Monthly Red Line Risk Report

The Red Line is simple:

When the S&P 500 is above the Red Line → Trend is positive

When the S&P 500 is below the Red Line → Trend is negative

The Monthly Signal

We only change our signal at month-end close.

Why? To filter out mid-month noise and false alarms.

Positive Signal: Price above the Red Line signals favorable conditions for growth Negative Signal: Price below the Red Line indicates priority on risk management

What you Get:

Paid subscribers receive:

• - Current Red Line status (S&P 500 and Nasdaq 100)

• - Momentum analysis (is the trend strengthening or weakening?)

• - Market breadth (what percentage of stocks are participating?)

• - Hypothetical model portfolio guidance

How the signal works:

- Weekly updates show current status

- Official signal comes at month-end close

- Model portfolio changes only at month-end

This reduces false signals while keeping you informed.

FREE: Check out the Shield Signal from January 2026:

Step 2: ⚔️ The Sword: Your Monthly Stock Rankings

Our M5 Momentum Algorithm We rank stocks using three factors:

• Absolute Momentum - Multi-timeframe price analysis

• Risk Adjustment - Incorporates T-Bill rates and volatility

• Quality Filtering - Market cap and institutional liquidity

The result: A monthly ranked list of the 5 stocks with the strongest risk-adjusted momentum.

What You Get

Paid subscribers receive:

• All 5 ranked stocks with momentum scores

• Annotated charts for each position

• Why stocks made or missed the list

• What we're watching for next month

When momentum breaks, stocks get removed—no emotions, just data.

FREE: Check out the Sword Post from January 2026:

How to Get Started

Try the Full System 7-day free trial.

• Read the Shield and Sword posts.

• Get a feel for the approach.

• See the full Red Line analysis, all 5 Sword stocks, and model portfolio guidance.

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Why This Approach?

Most newsletters give you opinions. We give you signals.

The Red Line doesn't care about:

- The Debt Ceiling

- Earnings reports

- Political drama

- Economic forecasts

It just tracks the trend. Simple. Systematic. Historical.

Ready to manage risk?

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Disclosures

Momentum Wealth Research LLC (“The Publisher”) is an independent publisher of financial information. The content provided herein, including the “Sword Rankings,” “Shield Report,” and hypothetical model portfolios, is for educational and informational purposes only. Momentum Wealth Research LLC and Momentum Wealth Planning, LLC (“The RIA”) are separate legal entities.

Your subscription does not create a fiduciary, client, or professional relationship with The Publisher or The RIA. All investment strategies, including the “Shield & Sword” system, involve a significant risk of loss. Past performance is no guarantee of future results. Model portfolios are purely conceptual and do not represent the performance of actual trading activity. Readers are encouraged to independently evaluate all investments and consult with a professional advisor before taking action.

Please see our full Terms of Service & Privacy Policy

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Concentration vs. Dilution

If you own a plethora of broad index funds, you own 500 to 3,000 stocks. While that provides ‘diversification’, history proves that a narrow decile of leadership drives the vast majority of market returns—the remaining thousands tend to simply underperform the index as a whole.

The Sword is our research tool designed in attempt to identify this leadership. Each month, our M5 Algorithm filters the market to find five names exhibiting the highest relative strength, overlayed by quality. When the Shield is Green (Above the Red Line), our model focuses on these leaders in attempt to capture the “Momentum Factor”.

⚔️ January | Executive Summary

• The Theme: “Sector Rotation.”

• The Signal: The M5 Algorithm has identified a clear rotation for January. We are seeing continued leadership in Mega-Cap Tech paired with a constructive rotation into Healthcare.

⚔️ The Top 5 Leaders (January)

These five names represent the current Sword Rankings

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Weekly Market Monitor & Risk Analysis

To read our full disclaimer, click here

The Bottom Line

Most investors buy an index fund and hope for the best. The Shield is the systematic upgrade to that strategy, designed to signal when the macro environment favors growth and when it's time to defend.

Headline Review:

• Earnings Season Kick-off: The big banks led the charge this week.

• Inflation & the Fed: The latest CPI data came in softer than expected.

• The Venezuela "boost" to Energy: Renewed geopolitical instability in Venezuela has tightened global supply expectations, providing a significant "kick" to domestic Energy leaders.

Market Status:

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If you own a plethora of broad index funds, you own 500 - 3,000 stocks. The problem? History proves that a handful of leaders do the heavy lifting while the remainder dilute your results.

The Sword is our research tool for identifying the leadership—the five stocks currently exhibiting the highest relative strength and leadership in our research model on a monthly basis. When the Shield is Green, our model identifies these five market leaders to capture the “Momentum Factor.”

⚔️ January Battle Plan: Executive Summary

• The Theme: “Sector Rotation.”

• The Signal: The M5 Algorithm has identified a clear rotation for January. We are seeing continued leadership in Mega-Cap Tech paired with a constructive rotation into Healthcare.

• Model Updates:

  • In: None.

  • Out: J.P. Morgan (Previously T5).

• Commentary: Professionals don’t look for action; they look for trends. Our current model signals that the strongest move is to maintain our current leadership positions and allow the momentum to work.

⚔️ The Top 5 Leaders (January)

These five names represent the current Sword Rankings

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