Excess Returns · Oct 8, 2026 · 42m · 30m saved
With Katie Stockton, Founder and Managing Partner of Fairlead Strategies
The Fairlead Tactical Sector ETF now holds about 50% in equities and the rest in short-term Treasuries, long-term Treasuries and gold, Katie Stockton said.
The S&P 500 and the Nasdaq 100 had both just reached new highs, and she said the secular bull market is still alive. Her fund's rules-based model has moved the other way anyway.
"So the ETF's positioning and sector rotation would hint at a weakening tape for twenty-seven, and it's kind of getting positioned for that." — Katie Stockton
Katie Stockton, Founder and Managing Partner of Fairlead Strategies, on Excess Returns, runs a technical-analysis research firm and manages two ETFs built on its signals: the Fairlead Tactical Sector ETF and a new tactical Bitcoin fund.
The full interview is covered here so you can skip it. 42 minutes of audio, 12 minutes of reading.
Here are the 14 calls that matter.
Key Takeaways
The secular and cyclical uptrends are both intact, led by large-cap indices at new highs
Breadth divergences are over-cited, she said, because they are often reversed quickly
Narrow leadership is not a reason to be bearish, and broader breadth could arrive in a weaker market
The 10-year yield's break above 4.75% was the big breakout, and she expects yields to stair-step higher
TACK is about 50% in stocks, with the rest in Treasuries and gold
Laggard sectors could see sharp relief rallies, so she would not sell them right here
Gold is in a downtrend but still a hedge, with support near 3,900
BNAV holds 70% Bitcoin at base and up to 150% when its timeframes line up
1. The Bull Market Is Intact
The hosts said that last quarter they had discussed a short-term loss of momentum inside a long-term uptrend, and asked where the S&P 500 stands now.
The secular bull market is alive, and the cyclical uptrend is intact too
Stockton said the cyclical uptrend has deteriorated outside the large-cap indices. The S&P 500 and the Nasdaq 100 had just reached new highs on concentrated leadership, which she called constructive.
"So if we consider the market to be the S&P 500, well, we're in pretty good shape, although it's not been an easy tape for people to navigate." — Katie Stockton
Long-term overbought readings matter less than downturns in momentum
Overbought conditions on monthly indicators are widespread. Over the summer some of those indicators turned down, mostly in the areas that led the correction, with semiconductors the best example. She said those downturns worry her more than an overbought reading on its own. The S&P 500 and Nasdaq 100 recovered enough to avoid one, but the segments that did turn down may not get back above the peaks they made in June.
