The Weekly Signal — Sunday Edition

Week in Review

This was a week of violent rotation hiding inside a flat headline number. The S&P 500 was roughly unchanged on the week, closing Friday at 6,472. But underneath that calm surface, the market was anything but quiet.

The Dow surged 2.5% to reclaim 50,000. The Russell 2000 gained 2.2%. The Nasdaq dropped 1.8%, dragged down by enterprise software names getting repriced in real time after Anthropic launched Claude Cowork plug-ins on Wednesday and then dropped Opus 4.6 on Friday. Salesforce fell 7%. ServiceNow fell 7%. FactSet lost 10%. The market is not debating whether AI disrupts enterprise software anymore. It is pricing it in.

Bitcoin had its worst week since FTX. From the mid-$70s to briefly below $60,000 on Thursday before clawing back to around $70,000 by Friday. This was not a crypto-specific event. It was a speculative unwind. Stablecoin outflows hit $14 billion. The Coinbase premium went negative for 21 straight days. When leverage breaks, price follows.

Gold staged a comeback after last week’s Warsh-induced crash. After dropping over 8% last Friday, it rallied hard early in the week and finished around $4,960. The selloff overshot. The bounce confirmed it.

The 10-year yield held steady at 4.22%, barely moving despite all the chaos underneath. That relative calm in bonds while everything else rotated is worth noting.

For the week: S&P flat. Dow +2.5%. Nasdaq -1.8%. Russell +2.2%. That is a 4.3% spread between the Dow and Nasdaq in a single week. The broadening is real, and it is accelerating.

Allocation Changes

No changes. Both strategies held their positioning steady through Friday’s close.

The THOR SDQ Index Rotation strategy remains 50/50 Dow and S&P 500 with Nasdaq turned off. The 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.

This is now the third consecutive week with no allocation changes. And that consistency is doing exactly what it is supposed to do. The system rotated out of Tech and Nasdaq before this week’s AI-driven software selloff. It has been avoiding Financials while the Warsh nomination uncertainty roils rate expectations. It has been overweight Energy and Industrials while they lead.

When the market punishes the sectors you are not in, the system does not need to do anything dramatic. It already did the work.

The Bigger Picture

Step back from the daily noise and something important is happening.

For two years, the market was a one-trick pony — own the Magnificent Seven or underperform. That trade is unwinding. Not catastrophically, but structurally. The AI narrative has not died — Alphabet just guided $185 billion in capex — but the market is making brutal distinctions. Are you building AI, or is AI about to replace you? Salesforce is on the wrong side of that question this week. So is FactSet.

The Dow outperforming the Nasdaq by 4.3% in a single week tells you everything. Capital is flowing from concentration into breadth. From narrative into earnings. From speculation into real economy. Industrials, energy, materials — the parts of the market that make and move things — are leading again.

The Bitcoin unwind adds another layer. When speculative assets correct 50%+ from their highs and equity markets hold together, it tells you the broader market has a different character than the speculative fringe. Quality is separating from speculation. That is healthy, even when it is painful for the portfolios concentrated in the wrong places.

This is exactly the kind of environment where systematic sector rotation earns its keep. When leadership is shifting, the worst thing you can do is make a gut call about which side of the AI trade to be on. The best thing you can do is let the data tell you what is working. That is our wheelhouse.

Signal Watch

THOR Risk Gauge: 8 — Bullish

Despite this week’s volatility, the Risk Gauge holds at 8. Both funds are nearly fully invested, and the sectors and indexes the system is positioned in are the ones holding up. The gauge reflects what THOR is actually doing with capital — and right now, it is deployed with conviction in the parts of the market that are working.

THOR SDQ Index Rotation — Index Signals

THOR Low Volatility Index — Sector Signals

Weekend Reading

Behind the Ticker: David Auerbach — Hoya Capital (HOMZ & RIET) This week’s guest is David Auerbach, CIO of Hoya Capital, who spent over a decade trading REITs at Green Street Advisors before launching two REIT-focused ETFs managing over $135 million. David breaks down the two biggest misconceptions advisors have about REITs, explains how RIET delivers a 10%+ annualized monthly dividend across 100 holdings, and digs into the housing supply shortage driving the HOMZ thesis. He also covers the current M&A wave that has seen 17 REITs merge or pursue strategic alternatives in just four months. Listen on Spotify | YouTube

“Pure Independence” — Morgan Housel, Collab Fund Housel’s latest: independence plus purpose equals a good life. Simple formula, deeply thought through. The best financial writing is not about money — it is about what money is for. Morgan at his most distilled. Read it here

Anthropic’s AI Disruption of Enterprise Software — Fortune The definitive piece on what Claude Cowork and Opus 4.6 mean for the software industry. If you want to understand why Salesforce and FactSet got crushed this week — and whether the selloff is overdone or just the beginning — start here. Read it here

“AI’s Energy Bottlenecks and the Decisions Ahead” — ETC Journal U.S. electricity demand could jump 25% by 2030 from data centers alone. This piece frames the tension between AI’s scale-at-all-costs approach and the physical limits of the grid. If you are thinking about the energy rotation, this is the infrastructure thesis underneath it. Read it here

“Why Kevin Warsh Won’t Revolutionize the Federal Reserve” — Council on Foreign Relations A measured, non-hysterical take on what Warsh’s nomination actually means for monetary policy. Spoiler: the Fed changes slowly, regardless of who is in the chair. Good antidote to the market’s initial overreaction. Read it here

Quote of the Week

“In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” — Benjamin Graham

A week like this one is pure voting machine. AI hype, AI panic, Bitcoin euphoria, Bitcoin crash, Warsh uncertainty — all in five sessions. The weighing machine has not changed. Earnings are growing. The economy is resilient. The rotation is healthy. The system sees through the votes and waits for the weight.

The Weekly Signal is published every Sunday by THOR Financial Technologies. Current positioning reflects live ETF holdings as of the most recent rebalance. This is not investment advice — it is what the data is showing. Past performance does not guarantee future results.

This content reflects the opinions, analyses, and research of THOR Financial Technologies as of the date published. It is provided for informational and educational purposes only and does not constitute investment advice and should not be relied upon as the basis for any investment decision. Past performance does not guarantee future results, and all investments involve risk.

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