🛡️The February Shield Report
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.
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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.
🛡️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 SPY 0.00%↑
Above the Red Line ✅
Nasdaq 100 QQQ 0.00%↑
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 SPY 0.00%↑
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 QQQ 0.00%↑
Positive ✅
Advanced analysis: A more thematic analysis this month for the Nasdaq 100 QQQ 0.00%↑ 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 MSFT 0.00%↑ , TSLA 0.00%↑ , META 0.00%↑ , and AAPL 0.00%↑ . 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
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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 MU 0.00%↑ and LRCX 0.00%↑ likely to be added to the Sword Stocks - stay tuned for the Sword Rankings this weekend.
Energy XLE 0.00%↑ making new 2-year highs as oil prices rise. XOM 0.00%↑ 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.
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