Focus: USMarket Close: Fri, 23 January 2026
Materials and Real Estate Surge While Biotech and Software Show Warning Signs By Liam Boggan, Quantmatix CEO and Founder, Head of Research A decisive rotation is underway in U.S. equities, and the momentum signals are pointing toward opportunity in unexpected places. At Quantmatix, our systematic analysis reveals a market increasingly divided between sectors building genuine momentum and those showing early exhaustion signals. For investors willing to position ahead of consensus, the next several weeks could prove pivotal. The Rotation Taking Shape Materials and real estate are experiencing the kind of acceleration that typically precedes sustained institutional buying. Materials demonstrates what we call "mature positive momentum"—broad-based strength with institutional conviction behind it. The combination of overwhelming acceleration and minimal negative reversals suggests this trend has runway measured in weeks, not days. Real estate presents an even more compelling setup. High momentum is building from a low base, creating the classic overlooked opportunity where early positioning pays off before the crowd arrives. This "bullish surge from low regime" pattern offers room to run as capital eventually rotates in. Where Risk Is Building Energy tells a different story entirely. Despite surface-level strength, our momentum data reveals a "bear plunge" pattern—historical strength meeting rising deceleration. The sector looks fine to most investors, but momentum is rolling over underneath. By the time this becomes consensus, exit opportunities narrow dramatically. Biotechnology and pharmaceuticals show similar warning signs. While some names demonstrate compelling momentum, the sector overall displays mixed signals with regime contraction despite scattered strength. This exhaustion risk profile suggests selectivity matters far more than broad exposure. Technology's Internal Fracture Technology remains the market's most important sector, but internal divergence is accelerating. Software shows pockets of explosive strength in names experiencing genuine business inflections. These represent early-stage opportunities with volatility, but also conviction. Semiconductors face mounting headwinds. The broader pattern lacks the deep positive signals that mark sustainable trends. This isn't a sector to abandon—it's one that demands tactical precision rather than blanket positioning. The Strategic Imperative The message from our momentum analysis is unambiguous: rotate toward materials and real estate strength while taking profits in energy and maintaining selectivity in biotech and pharma. Technology requires subsector navigation, not broad exposure. The broader market may grind higher, but dispersion between sectors has rarely mattered more. Passive exposure masks the reality that different sectors are experiencing radically different momentum regimes. Materials and real estate offer established and emerging trends worth overweighting. Energy and parts of healthcare flash profit-taking signals worth heeding. At Quantmatix, we measure what's happening right now in price action across thousands of securities and translate it into actionable rotation strategies. The patterns we're tracking in materials, real estate, energy, and biotech aren't predictions—they're observable momentum shifts that create advantage for those positioned ahead of the move. Swing Trading Ideas (1–4 Weeks) - TEVO MethodologyThis week's TEVO swing trading shortlist presents a single high-conviction medium-term reversal long setup in the industrials sector, targeting oversold conditions with improving momentum. The opportunity aligns with our rigorous criteria, featuring a strong historical hit rate for similar configurations. These setups offer potential for 1-4 week swings, emphasizing quality opportunities in a selective market environment.
TEVO trades pick oversold/overbought but improving setups with positive expected value, strong historical hit-rates, giving you only the highest-probability swing opportunities each week. Market MovementsMajor indices ended the week largely flat, with the S&P 500 and Russell 1000 showing minimal changes, while small caps in the Russell 2000 lagged notably; among the Magnificent 7, Microsoft and Amazon led gains in technology, but the group as a whole was mixed amid broader rotation. Energy and Materials sectors outperformed via SPDR ETFs, supported by equal-weighted GICS data showing strength in these cyclical areas, whereas Financials and Health Care declined sharply, with the VIX rising to signal increased caution. What this means: The rotation toward commodities suggests investors are positioning for inflation or growth surprises, but weakness in financials points to lingering rate sensitivity; medium-term reversal signals in laggards like Financials could signal upcoming mean-reversion if momentum shifts. Market Snapshot
Focus:
Russell 1000
Quantmatix Success StoriesQuantmatix signals delivered robust performance last week, with medium- and short-term reversals capturing gains up to 16.9% in names like QIAGEN and QuidelOrtho, affirming our edge in identifying high-probability trades.
Disclaimer: These insights are generated using AI and are provided for informational purposes only. They do not constitute financial advice or a recommendation to buy or sell any security. The content may be incomplete or contain errors and should not be relied upon for investment decisions. Always consult a qualified financial adviser before making financial choices. |
-
US Materials and Real Estate Surge While Biotech and Software Show Warning Signs
North America1 1 0
Focus: US