RJ Hamster
This Sector Shift Isn’t Random
Wednesday, February 4, 2026
Don here…
The Nasdaq just breached the lower edge of its expected move. The Dow is pushing the upper edge of its expected move. That divergence tells you everything about what’s happening right now.
I’m calling it sector insanity.
Fund managers are chasing anything that isn’t tech. The moves reek of desperation.
XLB, the materials ETF, did 50 times its normal daily volume today. This isn’t options activity driving it. This is pure panic buying.
70 out of 100 stocks in the S&P 100 traded higher today. The index still closed red. Tech is so heavy it’s dragging down the entire market even with a wildly positive advance decline line.
Two scenarios play out from here. Either tech bounces from oversold territory and fund managers dump the defensive names they panic-bought. Or tech continues to bleed and the dominoes fall across every sector.
Consumer staples get annihilated in both scenarios.
In tonight’s video, I break down the manic rotation and what happens next:
- ExxonMobil is up over 20% year to date while oil prices don’t justify the move
- Walmart is trading like a tech stock with parabolic price action
- XLP consumer staples is in a parabolic move where I’m positioned bearish
- The S&P 500 has an $85 expected move with two trading sessions left this week
- Tomorrow alone has a $60 expected move with Amazon earnings on deck
We’re stuck between 6950 and 6850 on the S&P 500 futures. I’ve been flagging these levels for weeks. We hit 6862 today and bounced.
Things are about to get wild.
Don Kaufman
Chief Market Strategist, TheoTRADE
P.S. Selloffs like this separate traders who react from traders who see it coming.
Thursday at 7PM ET, Blake is revealing Deep Sonar, the method he uses to detect pressure building beneath the surface before moves become obvious. It’s how he captured $3,300+ on TSM and $3,900+ on PLTR.
One night only.
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Warm regards,
Don Kaufman
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