Panic Buying: The new 'King' of the market has just been crowned (and it's not Tech)"

Research Notes January 2026 > https://www.unum.capital/post/rjan2026

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1. Executive Summary: The Verdict

The "Real Economy" Roars, Tech Fades The first trading week of 2026 has delivered a massive cyclical rotation. Capital is aggressively abandoning "Growth" sectors (Technology and Communications) and flooding into "Real Economy" cyclicals.

Materials have staged a spectacular breakout, moving from a laggard status at year-end to the absolute market leader, flashing "High Bullish Momentum / Approaching Overbought" on both Medium and Short term timeframes. Industrials and Consumer Discretionary have joined the party, posting "Double Strong" signals.

In a significant shift, Technology—the 2025 leader—has lost its "Strong" Long Term rating, dropping to Neutral. Communications has suffered a momentum collapse, shifting from a leader to a laggard in just one week.

2. Strategic Asset Allocation View

Suggested portfolio weighting relative to the S&P 500 (SPY) based on closing technical posture.

🟢 Overweight (Accumulate / Ride Trend)

• Materials: The new undisputed King. "Double High Bullish" signal indicates panic buying.

• Industrials: Breakout confirmed. "Double Strong" (Med/Short Term).

• Consumer Discretionary: Major reversal. Shifted from "Weak" to "Double Strong."

🟡 Tactical Buy (Speculative)

• Energy: New Signal. Short Term shifted to "Strong." A tactical bounce within a weak structural trend.

🟡 Neutral (Hold)

• Financials: Boring but stable. "Triple Neutral."

• Technology: Downgrade. Long Term dropped to "Neutral." No longer a leader; market weight only.

• Healthcare: Momentum faded. Dropped to "Triple Neutral."

🔴 Underweight (Avoid)

• Communications: Major Downgrade. Momentum collapsed from "Strong" to "Weak."

• Real Estate: Toxic. Deteriorated to "High Bearish Momentum."

• Utilities: Breakdown. "Triple Weak."

3. Detailed Sector Analysis by Tier

Tier 1: The New Market Leaders (Cyclicals)

• Sector: Materials

• Status: Parabolic Breakout

• Technical Profile (09 Jan):

  • Medium Term: High Bullish Momentum / Approaching Overbought

  • Short Term: High Bullish Momentum / Approaching Overbought

• Analysis: An explosion of buying power. From "Neutral" at year-end to maximum bullishness. Chase with caution (overbought), but the trend is undeniable.

Tier 2: The Breakout Stars

• Sectors: Industrials, Consumer Discretionary

• Status: Trend Following

• Technical Profile (09 Jan):

  • Medium Term: Strong

  • Short Term: Strong

• Analysis: Industrials broke out of a long-term "Weak" structure. Discretionary reversed violently from "Weak" to "Strong," suggesting the consumer is stronger than expected.

Tier 3: The Fading Giants

• Sectors: Technology, Healthcare

• Status: Lost Momentum

• Technical Profile (09 Jan):

  • Medium/Short Term: Neutral

• Analysis: The leaders of 2025 are tired. Tech lost its Long Term edge, and Healthcare lost its Medium Term "Strong" rating. They are now sources of funds, not destinations.

Tier 4: The Danger Zone

• Sectors: Real Estate, Utilities

• Status: Deep Distress

• Technical Profile (09 Jan):

  • Real Estate: High Bearish (MT) / Weak (ST)

  • Utilities: Weak (LT/MT/ST)

• Analysis: Interest rate sensitive sectors are being crushed. Real Estate's Medium Term signal worsened to "High Bearish," signaling a crash.

Lester Davids

Senior Investment Analyst: Unum Capital