The Insider Report: Cracks Deepen in the Rally's Foundation

Benzinga_recent_news02-08 22:58

It was a tale of two tapes in stocks last week. The Dow Jones Industrial Average led the way to the upside, and blasted off to a new all-time high. It finished up 2.50% on the week. But the tech-heavy...

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The Dow Jones Industrial Average led the way to the upside, and blasted off to a new all-time high. It finished up 2.50% on the week. But the tech-heavy...</p>\n\n<a href=\"https://www.benzinga.com/opinion/26/02/50469946/the-insider-report-cracks-deepen-in-the-rallys-foundation\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"ETH","symbol_name":"低成本以太坊ETF-Grayscale","start_time":0,"source_url":"https://www.benzinga.com/opinion/26/02/50469946/the-insider-report-cracks-deepen-in-the-rallys-foundation","article_id":"2609574910","we_media_id":null,"thumbnails":["https://cdn.benzinga.com/files/images/story/2026/02/08/cityskylineblue.png?optimize=medium&dpr=2&auto=webp&width=240"],"rights":{"source":"benzinga_recent_news","url":"https://www.benzinga.com/opinion/26/02/50469946/the-insider-report-cracks-deepen-in-the-rallys-foundation","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2609574910","pubTimestamp":1770562680,"columns":[],"sourceInfo":{"source_id":"benzinga_recent_news","name":"Benzinga"},"weMediaInfo":null,"summary":"It was a tale of two tapes in stocks last week. The Dow Jones Industrial Average led the way to the upside, and blasted off to a new all-time high. It finished up 2.50% on the week. But the tech-heavy Nasdaq fared much worse, as it closed down 1.84%. The S&P 500 finished mostly flat, and just 0.10% lower. The sector leadership underneath the surface is painting a very cautionary tale near-term. Still, it's setting up the biggest and best buying opportunity of 2026. Crypto markets crashed and have erased all of their gains since last year's low. It's still an environment to tread carefully although there are still pockets of opportunity.This market-cap-weighted structure means mega-cap tech stocks like Nvidia, Apple, Microsoft, and others exert outsized influence—often dominating index movements. When tech underperforms, the S&P 500 can still decline or lag significantly even if many other sectors post strong gains, because the heavy weighting of tech drags the overall cap-weighted inde","collect":0,"end_time":0,"defaultTopTitle":"benzinga.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"ETH":"低成本以太坊ETF-Grayscale","ETHA":"以太坊ETF-iShares","QETH":"以太坊ETF-Invesco Galaxy","TIP":"通胀债券指数ETF-iShares Barclays","BTF":"比特币&以太币期货ETF-CoinShares","BK4581":"高盛持仓","SETH":"1倍做空以太币期货ETF-Proshares","ETHD":"ProShares UltraShort Ether ETF","ETQ":"T-Rex 2X Inverse Ether Daily Target ETF","BK4570":"地缘局势概念股","ETHE":"最大以太坊ETF-Grayscale","XLI":"工业指数ETF-SPDR","BK4585":"ETF&股票定投概念","ETHI":"Defiance Leveraged Long Income Ethereum ETF","XBI":"SPDR S&P Biotech ETF","LABU":"三倍做多标普生物-Direxion","XLV":"健康照护类股ETF-SPDR","XLB":"材料ETF","ETHT":"ProShares Ultra Ether ETF","EETH":"以太币期货ETF-ProShares","ETU":"T-Rex 2X Long Ether Daily Target ETF","ETCO":"Grayscale Ethereum Covered Call ETF","BK4535":"淡马锡持仓","XLK":"高科技指数ETF-SPDR","EZET":"以太坊ETF-Franklin","ETHU":"2倍以太币期货ETF-Volatility Shares","XLY":"消费品指数ETF-SPDR可选消费品","FETH":"以太币ETF-Fidelity","IEF":"债券指数ETF-iShares Barclays 7-10年","ETHV":"以太坊ETF-VanEck","YETH":"Roundhill Ether Covered Call Strategy ETF","XLP":"消费品指数ETF-SPDR主要消费品","BK4550":"红杉资本持仓","BK4588":"碎股","ETHW":"以太坊ETF-Bitwise","XLE":"SPDR能源指数ETF"},"translate_title":"内幕报道：反弹基础裂痕加深","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ETHD":0.6,"ETH":0.6,"ETHA":0.6,"ETHE":0.6,"SETH":0.6,"ETCO":0.6,"XLP":1,"XLY":1,"YETH":0.6,"ETHT":0.6,"ETHW":0.6,"QETH":0.6,"LABU":0.6,"ETHU":0.6,"XLE":1,"BTF":0.6,"FETH":0.6,"EETH":0.6,"XLV":1,"ETQ":0.6,"ETU":0.6,"ETHI":0.6,"XLB":1,"XLK":1,"TIP":1,"IEF":1,"ETHV":0.6,"EZET":0.6,"XLI":1,"XBI":0.6},"content_text":"It was a tale of two tapes in stocks last week. The Dow Jones Industrial Average led the way to the upside, and blasted off to a new all-time high. It finished up 2.50% on the week. But the tech-heavy Nasdaq fared much worse, as it closed down 1.84%. The S&P 500 finished mostly flat, and just 0.10% lower. The sector leadership underneath the surface is painting a very cautionary tale near-term. Still, it's setting up the biggest and best buying opportunity of 2026. Crypto markets crashed and have erased all of their gains since last year's low. It's still an environment to tread carefully although there are still pockets of opportunity.\nThe S&P 500 is heavily concentrated in the tec sector, which accounts for roughly 30% of the index’s total market capitalization weight. It's followed by Financials at roughly 14.7%, Consumer Cyclical (Discretionary) at 10.6%, Communication Services at 10.2%, and Healthcare at 10.1%, with smaller allocations in Industrials (9%), Consumer Staples (5%), Energy (~4.6%), and the rest in Utilities, Real Estate, and Materials.\nThis market-cap-weighted structure means mega-cap tech stocks like Nvidia, Apple, Microsoft, and others exert outsized influence—often dominating index movements. When tech underperforms, the S&P 500 can still decline or lag significantly even if many other sectors post strong gains, because the heavy weighting of tech drags the overall cap-weighted index lower despite broader participation elsewhere.\nThis concentration highlights why equal-weighted versions of the index often tell a different story during such rotations. We'll know soon enough if this is just a run-of-the-mill rotation or the start of a real downswing lower.\nDespite the weakness at the index level, it's not all negative out there underneath the surface. Last week, there was a surge in 52-week highs in both the New York Stock Exchange and the S&P 500. This isn't something you would see in a market that's about to turn bearish.\nInstead, this supports the idea that the volatility in stocks right now is part of a regular, cyclical correction. If anything, this is serving to reset the market's sentiment right now – for a while there, bulls were dominating the tape. These pullbacks help to bring sentiment back to earth.\nBut given the carnage in the tech space, I won't be ready to signal the \"all clear\" until it starts to outperform again. Tech is known to lead coming out of market bottoms, and it's also known to lead to the downside once markets top. It's really just a waiting game at this point.\nAnother week has passed, and more deterioration has crept into the market's internals. All of the defensive sectors like energy (XLE), consumer staples (XLP), and healthcare (XLV) have continued their recent momentum, which is a big concern for bulls.\nTo make matters worse, the risk-on and growth-oriented sectors in technology (XLK) and consumer discretionary (XLY) are the worst-performing sectors going back to the start of the fourth quarter now. This is not something you see in a healthy tape.\nIt has become a tale of two tapes at this point. Of the top five performing sectors, only industrials (XLI) could be construed as truly bullish. A case could be made for basic materials (XLB), but it depends more on the overall economic environment. The current sector leadership still warns of caution in the near-term.\nEditor's Note: Consumer staples leading near-term is not what bulls want to see.\nIt's been a tale of two tapes lately for the energy (XLE) and the tech (XLK) sectors. Tech is the most important sector in the market, as it makes up around 30% of the S&P 500, while energy makes up around 3%.\nIn other words, without the tech sector participating, and more importantly, outperforming, the indices are going to have a tough time. It's why this potential breakout from a rounding bottom formation in this ratio is so notable.\nEnergy hasn't outperformed the tech sector since 2022, which ended up being the longest bear market since the 2008-2009 financial crisis. If this ratio takes out the high from March 2025, it would signal a new bull trend in favor of energy over tech. This could spell trouble for stocks in time.\nConsumption dominates the U.S. economy. It makes up around 70% of GDP. People spend money on a variety of things, but it can be broken down simply into needs versus wants. We can gauge this in markets by comparing consumer staples (XLP) and consumer discretionary (XLY).\nThe logic behind this ratio is simple. When consumer discretionary (what people want) outperforms consumer staples (what people need), it's bullish. When staples outperform discretionary, it's bearish.\nIt's therefore no surprise to see how this ratio dropped for the past couple of years – stocks have been hitting new highs. But it's started to climb in favor of XLP over XLY in recent weeks, which is a warning sign. I'm watching to see if it can tag the downward sloping trendline of the past couple years.\nBased on some of the behavior in the bond market, the recent moves in energy are worthing believing. The bond market typically has a better feel of what's going on compared to anything else, so it's time to check in on the ratio between Treasury Inflation Protected Securities (TIP) and 7-10 Year Treasuries (IEF).\nWhen TIP outperforms IEF, or this ratio rises, it means that the bond market is sniffing out higher inflationary pressures. If this ratio is dropping, it means that the bond market doesn't deem inflation as a threat.\nFor a couple years now, this ratio has consolidated into the symmetrical triangle formation. This often leads to continuations in trend. If the ratio breaks above the upper trendline of the formation, the Fed is going to have a tough time justifying rate cuts from here.\nBack to Ethereum this week as the carnage in the crypto sector continues. The infamous four year cycle is unfolding in front of us right now as Ethereum trades back at levels not seen since May 2025.\nOver the past week, Ethereum collapsed below technical support in the 2600-2800 zone. The path of least resistance remains lower as long as it stays below there, but it's also breaking the next support zone at 2100-2200.\nThis means we could be setting up for a final washout down to the 1650-1750 zone. It tagged the upper bound of this late-last week. This is going to be a big test because if Ethereum holds this level, it could be setting up conditions for an important bottom. It could be one of the best buying opportunities in years.\nLegal Disclosures:\nThis communication is provided for information purposes only. \nTo add Benzinga News as your preferred source on Google, click here.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.36.2","shortVersion":"4.36.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2609574910","isCrawlerRequest":true}