Hey, Traders.
Something is starting to happen quietly in the market as the flow of money is shifting.
For the past few years, mostly everything has been about high-growth names and chasing upside in tickers with a good story and a strong chart.
But that trade is starting to wear thin now.
The market is becoming more selective and fundamentals are coming back into focus.
I think we’re entering a phase where capital could rotate out of the usual tech-growth favorites.
Instead, it could be heading into sectors more tied to the economy itself, or to long-term structural change.
Let’s take a closer look at where things might be heading — and why they matter.
Where the Shift Is
Two sectors are catching attention right now: industrials and financials.
These tend to move when the market starts pricing in stronger economic activity.
That means things like infrastructure spending, better trade flow, or easing tariffs.
If the supply chain resets or global trade picks up, industrials are primed to benefit.
If credit starts flowing again or the rate picture stabilizes, financials could start gaining real ground.
Tech Isn’t Dead, But …
I’m not saying that tech is out of the picture, but it is shifting.
The broad tech rally that rewarded everything with a Nasdaq ticker might cool off.
What’s showing more staying power are AI, cloud infrastructure, and data centers — the backbone of how businesses are changing.
Even as some tech funds have seen outflows, the big AI names haven’t been affected that much.
That’s not by accident.
There’s a difference between hype and utility, and the market’s getting better at distinguishing between them.
The opportunity in tech is still there.
It’s just narrower, more selective, and requires a sharper eye.
What’s Losing Steam
Some of the so-called safe havens like healthcare and communication services aren’t looking as strong these days.
They’ve had a good run, but with inflation still sticky, policy risk, and valuations looking a bit stretched, they’re not what they once were.
We’ve already seen fund outflows from some of the bigger healthcare names.
That doesn’t mean these sectors are untradeable, but they’re not where momentum is building right now.
Defensives in Neutral
Utilities and consumer staples always get a look when the market’s nervous.
And if you think we’re headed into a full-blown downturn, they make sense.
But if the economy’s just shifting gears instead of stalling out, defensives can feel stale.
They protect capital, but they don’t grow it much.
Right now, they’re more of a parking spot than a launch point.
What I’m Doing Now
Right now, I’m watching for early signs of leadership in industrials and financials.
That means volume picking up, breakout patterns forming, and price strength off key support levels.
In tech, I’m focusing on AI or infrastructure names holding tight consolidations, especially if they’re starting to trade clean off VWAP or support zones.
The high-flyers with bloated valuations are mostly off the list unless they reset.
My process is simple: volume, structure, and timing.
The second the setup breaks down, I’m out.
Discipline matters most in times like this, when sector rotation is starting but hasn’t gone full tilt yet.
The bottom line here is this: Industrials and financials are waking up and certain tech names still have juice.
With the rest, you need to be selective.
Stay sharp,
Jack Kellogg