The Weekly Signal — Sunday Edition

Week in Review

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.

Allocation Changes

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 hasns how systematic investing is supposed to work.

The Bigger Picture

Theret 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 doesnre designed to detect exactly this kind of structural change — not predict it, just recognize it once itt whether diversification is back. Its 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 weve been in decades. After 2008, consumers actually deleveraged — and itm Pretty Sure About” — Morgan Housel, Collab Fund
Morgans 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

Current Positioning

THOR SDQ Index Rotation — Index Rotation

THOR Low Volatility Index — Sector Rotation

Quote of the Week

“The stock market is a device for transferring money from the impatient to the patient.”
— Warren Buffett

Simple. Overused. Still true. In a week where the temptation is to chase tech back down or panic about a broad selloff, the systemt guarantee future results, and all investments involve risk.

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