Don't Panic As We Clear Speculative Excess In Crypto, Metals, And Tech

2026-02-06 09:00:05 ET

The rotation from growth to value continued yesterday, but it was more difficult to see, because the only sectors of the S&P 500 to realize a very modest gain were utilities and consumer staples. During bull markets, pockets of speculation build in different segments of the market on a recurring basis, leading to unsustainable valuations. As we began 2026, the enthusiasm for cryptocurrencies had already started to wane. Meanwhile, mini bubbles in grossly overvalued technology stocks and precious metals were taking shape. Today, all three are imploding at the same time. I think this is because the same group of aggressive, momentum-chasing investors were leveraged in all three. A sell off in one forces margin calls in the others on a rotational basis, and the unwind feeds on itself....

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