Friday the 13th: Tech Gets Spooked, Defensives Hold the Line

Market Pulse

Friday the 13th is living up to its reputation.

Futures are pointing lower again this morning -- S&P 500 at 6,828 (-23), Dow at 49,367 (-156), Nasdaq at 24,674 (-94). This follows yesterdays driving it: The tech rotation that started as a trickle has become a river. AI disruption fears are hammering software and growth stocks as investors reassess what generative AI actually does to margins across the economy. Yesterdays the tell: Utilities rose 1.9% and Consumer Staples gained 1.3%. Money isns rotating from offense to defense.

The macro backdrop actually looks fine. January CPI (released Tuesday) came in at 2.5% headline and 2.6% core -- the lowest since 2021 on core. Monthly core was 0.2%, below the 0.3% consensus. This should be good news for rate cuts, but the Fed is in no rush: the FOMC held at 3.5-3.75% with a 10-2 vote in January. Meanwhile, the White House nominated Kevin Warsh as the next Fed Chair, adding a layer of policy uncertainty.

Asia followed the U.S. lower overnight. Hang Seng -1.7%, Nikkei -1.2%, Shanghai -1.3%, ASX -1.4%. Europe is mixed and mostly flat -- STOXX 50 -0.09%, FTSE barely green.

The numbers: - Gold: $4,962.50, +0.28% -- stabilizing after yesterdayt fully taken hold in bonds. - VIX: 21.47, +3.1% -- elevated but not panicked. The Nasdaq VXN at 26.87 (+15.5%) tells you where the real fear is concentrated. - Bitcoin: Down ~3% -- crypto continues to trade as a risk asset, not a hedge.

The THOR View

This is exactly the kind of environment the system was built for.

When THOR SDQ Index Rotation turned Nasdaq off and moved to a 50/50 Dow-S&P split, it wasn't a prediction about AI or earnings or any specific catalyst. It was the data. The trend data in Nasdaq deteriorated, and the system acted. No emotion, no narrative, no CNBC-fueled gut call.

Yesterday, the Nasdaq dropped 2% while the Dow "only" lost 1.7%. That gap compounds over time.

THOR Low Volatility Index tells an even sharper story. With Technology, Financials, and Real Estate off -- the three worst-performing sectors yesterday -- the fundt just dodge the losers -- it owned the winners.

Does this mean tech is dead? Of course not. But when 60% of the Nasdaq is tech and tech isnt bearish -- its the feature, not the bug.

The Risk Gauge stays at 8 -- Bullish. THOR is heavily invested, just not in the places getting hit the hardest. There's a difference between being cautious and being selective. The system is the latter right now.

Signal Watch

THOR Risk Gauge: 8 -- Bullish

Heavily invested, selectively positioned. Avoiding the tech wreckage while staying in the market.

THOR SDQ Index Rotation -- Current Positioning

THOR Low Volatility Index -- Current Positioning

Holdings as of 2/12/26. 7 of 10 sectors risk-on. Tech, Financials, and Real Estate OFF.

One Thing to Watch

The Defensive Rotation Has Legs -- Watch Next Weeks session will tell us whether this tech selloff is a one-week flush or the start of something bigger. The key level: Nasdaq 100 at 24,500. If it breaks, expect the rotation into defensives to accelerate.