Correlation Breakdown

February 9, 2026 • 1 minute, 12 second read

On Friday, during a face-ripping rally, the S&P 500 rallied nearly 2% and erased a week of losses.

The week’s trading revealed that a rotation out of high-flying tech into defensive names is well underway. The Dow, which includes broader, non-tech-related stocks, is starting the week above 50,000 for the first time in its history.

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The correlation between S&P 500 sectors indicates capital flight from tech into other sectors. (Source: Sentiment Trader)

Prior breakdowns in S&P 500 correlation have signaled market weakness. Most notably in the tech wreck of 2000-01.

“We’ve got our eyes peeled for further signs of a tech selloff,” notes our portfolio director, Andrew Packer. “Take some profits off the table, and expect more big swings.”

If markets sell off in earnest, the correlation between sectors will get back into whack… as everything gets sold off in unison.

~ Addison

P.S. On Friday, Andrew, Mark Jeftovic, and I dug deep into the bitcoin and crypto selloff on Grey Swan Live! We unpacked a set of signals in crypto and Dollar 2.0 digital assets that rarely appear together — and almost never by accident.

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As a proxy for the space, bitcoin is down close to 50% after another pullback over the weekend. Now is a good time to know what the sell-off means for gold, silver and the companies we still recommend in our Dollar 2.0 thesis. Check out the replay in the members section of the Grey Swan website.

Ripple Effect

Correlation Breakdown

Addison Wiggin

February 9, 2026 • 1 minute, 12 second read

correlation S&P 500 Stock Market

On Friday, during a face-ripping rally, the S&P 500 rallied nearly 2% and erased a week of losses.

Turn Your Images On

The correlation between S&P 500 sectors indicates capital flight from tech into other sectors. (Source: Sentiment Trader)

Prior breakdowns in S&P 500 correlation have signaled market weakness. Most notably in the tech wreck of 2000-01.

“We’ve got our eyes peeled for further signs of a tech selloff,” notes our portfolio director, Andrew Packer. “Take some profits off the table, and expect more big swings.”

If markets sell off in earnest, the correlation between sectors will get back into whack… as everything gets sold off in unison.

~ Addison

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Stack Coins and Cash to Sidestep the Private Credit Crunch

February 27, 2026 • Andrew Packer

There’s just something about collectibles. Perhaps it’s because you’re holding something tangible in your hand, not just a share of a company. I certainly get a lot of joy looking through my coin collection or researching prices on pieces I want to acquire someday.

Collectibles had a moment in the sun in 2021 and 2022, as investors were looking for an inflation hedge. The space has cooled off a bit, making now an optimal time to consider investing in collectibles.

While today’s focus – and my personal interest – is in rare coins – you may be more interested in stamps, art, antiques, even vintage cars. In the collectible space, there’s something for everyone. That’s part of the joy.

More importantly, with collectibles out of favor, it may be a good asset to rotate some of your wealth into.

Stack Coins and Cash to Sidestep the Private Credit Crunch

Beware Stocks In March

February 27, 2026 • Addison Wiggin

If the S&P 500 closes over 6,910 today, the index will be up for February and continue its strong performance since last April.

But, looking at the monthly relative strength index (RSI), the market is flashing an overbought signal.

Nvidia’s Earnings Can’t Beat Seasonality

February 26, 2026 • Andrew Packer

Nvidia’s selloff isn’t unexpected. It reports late in earnings season. Most of its customers have already reported how many chips they’ve bought or plan to buy.

Most of those big-tech names sold off after their earnings in recent weeks, too. But we’re seeing signs of a slowdown, of sorts.

Companies like Microsoft and Apple are now increasing their AI spend so much that they’re slowing their spending on other priorities.

Nvidia’s Earnings Can’t Beat Seasonality

Mind the Death Jaws

February 26, 2026 • Addison Wiggin

For AI-linked companies — Nvidia foremost among them — investor expectations continue to rise along with their valuations. At this point, even billions in profit are not enough.

Like the fiber optic spending plans that dominated the 1990s at the height of the dotcom bubble, AI spending is squeezing the cash flows for the S&P 500’s biggest companies.

Stack Coins and Cash to Sidestep the Private Credit Crunch

February 27, 2026 • Andrew Packer

More importantly, with collectibles out of favor, it may be a good asset to rotate some of your wealth into.

Beware Stocks In March

February 27, 2026 • Addison Wiggin

If the S&P 500 closes over 6,910 today, the index will be up for February and continue its strong performance since last April.

But, looking at the monthly relative strength index (RSI), the market is flashing an overbought signal.

Nvidia’s Earnings Can’t Beat Seasonality

February 26, 2026 • Andrew Packer

Nvidia’s selloff isn’t unexpected. It reports late in earnings season. Most of its customers have already reported how many chips they’ve bought or plan to buy.

Most of those big-tech names sold off after their earnings in recent weeks, too. But we’re seeing signs of a slowdown, of sorts.

Companies like Microsoft and Apple are now increasing their AI spend so much that they’re slowing their spending on other priorities.

Mind the Death Jaws

February 26, 2026 • Addison Wiggin

For AI-linked companies — Nvidia foremost among them — investor expectations continue to rise along with their valuations. At this point, even billions in profit are not enough.

Like the fiber optic spending plans that dominated the 1990s at the height of the dotcom bubble, AI spending is squeezing the cash flows for the S&P 500’s biggest companies.