- Howie Town
- Posts
- Momentum Monday - War In the MIddle East and The $VIX Barey Budged
Momentum Monday - War In the MIddle East and The $VIX Barey Budged
Howard Lindzon
March 02, 2026
As a reminder, MarketSurge (by Investor’s Business Daily) is a sponsor of the weekly show. All the charts you have been seeing in the videos and will continue to see are from MarketSurge. They are offering my readers 2 months for $59.95 - save $239. That's 80% off the most powerful stock research platform for individual investors.
Good morning,
Investors are pretty calm all things considered this Monday morning.
The $VIX is hovering around 20 - not low - as the USA and Israel wage war on Iran and Iran on everyone within reach.
As always, Ivanhoff and I tour the markets looking at the trends and momentum and it does look that the rotation already in place towards hard assets and businesses AI wont’ ‘crush immediately’ softened the war blow on the markets. The video of today’s show is down below and the charts we discussed below that, but I have also included two charts that help explain what we are seeing. The first clearly shows that Energy, Consumer Staples and Materials have been in vogue for a while now. The second might explain why both small caps have underperformed forever and are coming back in favor now. Earnings do drive markets so it makes sense that the Mag 7 have dominated for so long over small caps. BUT, as the Mag 7 spend all their cash and even borrow to win an AI race/war, the small caps don’t look as terrible. With rates coming down and risk still ‘on’ the money, rotation is doing it’s thing as the money staying in the market just moves. Hope you enjoy the show…
Welcome back to Momentum Monday!
In today’s episode of Momentum Monday, Ivanhoff and I discuss the following:
Geopolitical Impact on Markets
Energy and Transportation Strength
Big Tech Distribution vs. Small Caps
Defensive Rotations and Economic Outlook
AI Infrastructure: Fiber Optics and Memory
Non-Tech Winners: New York Times and IMAX
In This Episode, We Cover:
Here are Ivanhoff’s thoughts:
Energy stocks have been the strongest sector year-to-date, and now we know why. The escalation in the Middle East is not a surprise, and the market has been anticipating it for some time. Crude oil and gold are having a sizable upside gap, US stocks are slightly lower, and Japanese and European stocks are the most affected. Historically, the US market rallies after the beginning of new wars, especially if the market realizes that the war is not likely to last long. If the oil infrastructure in the Middle East is not impacted, oil prices will also likely stabilize.
In the meantime, another Mag7 stock crushed estimates and sold off. The grand-daddy of AI, NVDA, is basically flat since last August despite record-breaking quarters and constant guidance increases. Institutions are selling. There’s distribution in tech. QQQ is still stuck in a range between 640 and 580. I wouldn’t be surprised if the lower end of the range is tested first in the next few weeks.
Financials remain weak and are bear-flagging below their 200-day moving average. The defensive, consumer staples, utilities, and healthcare are leading the market. The only tech exceptions have been fiber optic, memory chip, and HVAC stocks, which are some of the main AI infrastructure plays.
In other news, XYZ (the former Square) is planning to cut half of its workforce due to AI efficiencies – 4,000 people. Its CEO said that many other companies are likely do the same. This is a trend to watch. It is a slippery slope. Yes, your margins will improve initially, and your stock might bounce, but if every company does it, then the weaker consumer will impact everyone’s bottom line eventually, and the market might get spooked. The Fed can’t solve that by lowering interest rates.
And here are the charts discussed:
Reply