Full Metal Jacket
"Let me see your war face!"
One of the most iconic scenes in Full Metal Jacket is when Sergeant Hartman demands his troops show their “war face.”
It’s a loud, chaotic scene. But it works.
Because in that moment, he’s demanding transformation - from fearful recruits to war-ready killers.
What may be perceived as anger or bravado, Hartman’s tactic centers around resolve.
A willingness to step outside the comfort zone, face fear head-on, and convert uncertainty into clarity, discipline, and controlled aggression.
It’s exactly how I’m treating the markets right now.
Controlled, aggressive and ready for battle.
Instead of focusing on the areas that have kept SPX afloat over recent months, this week I’m turning to where the real battle is being fought.
Not in Regional Banks. Not in Small Caps. Not in Industrials.
Those trends are visible to anyone with a chart. But markets don’t pay you for spotting what’s obvious, they pay you for identifying what matters next.
And right now, in my view, risk-reward is skewed in favor of those willing to look a little closer at the market’s more battle-scarred terrain.
ARKK
If you want to understand risk appetite, ARKK provides one of the market’s purest gauges of speculative risk. When liquidity is abundant and confidence is high, capital flows toward duration, innovation, and future growth - and ARKK thrives.
Right now, this narrative is facing its toughest test since the April lows.
Since hitting the upper trendline back in October ARKK’s correction has been swift and brutal.
But look where buyers stepped in last week. Right at the bottom edge of the channel and a key pivot area - offering a glimmer of hope that risk sentiment, for now, is not completely shot.
Hold this level and entire narrative shifts.
Lose it, and things could get nasty.
Tickers in focus: TSLA, COIN, RBLX, SHOP
Bitcoin
Like ARKK, traders can view Bitcoin as a measure of market sentiment.
And without wanting to sound too repetitive, the story is clear: since hitting new highs in October last year, the move from $126k to multi-month lows has unfolded at lightening pace.
But again, look where buyers stepped in - stick saving the key pivot during Friday’s session with a not-too-shabby bounce of ~20% in just a few hours.
If risk appetite has truly peaked, then so has Bitcoin. But above the purple shaded bar there’s a pulse - and where’s there’s a pulse, there’s opportunity.
Tickers in focus: MSTR, COIN, RIOT, MARA
Software
After rejecting the 1.618–1.786 extension from the prior cycle highs to the April lows, IGV now finds itself sitting in the golden pocket between the 0.618 and 0.786 retracement.
Has software bottomed here? Nobody knows. But at these levels, I’m not betting against a comeback.
For clues, look no further than last week’s volume.
Off. The. Charts.
To me, that has the scent of capitulation - and after a brutal few months, software may be nearing the stage where sellers run out of urgency and buyers begin to quietly step back in.
Will it play out? Nobody knows. You’d need a crystal ball for that.
But from where I’m sitting, if the bull market that began in 2022 is to continue, it’s hard to see it happening without software finding its footing
Tickers in focus: MSFT, CRWD, ORCL, CRM
Bottom Fishing? Maybe
If you’ve read this and think I’m bottom-fishing — fair enough. I hear you.
But context matters. And the context, for those at the back, is still a bull market.
My approach has never been to chase what’s already flying at all-time highs. By the time something looks perfect, the easy money is usually gone.
I’m far more interested in identifying what could run next - the areas where pessimism is heavy, positioning is weak, and expectations are low.
Ironically, the same positions that Small Caps, Industrials and Regional Banks were in prior to resolving higher!
To me, that’s where real opportunity hides.
Am I early? Maybe.
Am I wrong? Possibly.
Could these charts sweep the prior lows and extend the downtrend that’s been in place since October? Absolutely.
But whilst markets rarely reward certainty - they can reward positioning.
And right now, from where I’m standing, betting on further structural collapse in software, innovation, and speculative growth within an ongoing bull cycle feels like fighting the tape rather than reading it.
If these areas stabilise, base, and begin to turn, they’ll do so in the face of unapparelled skepticism. And by the time your favorite furu is finally on board with the move, the bulk of the move will be in the rear view mirror.
That’s the phase I’m positioning for.
My war face is ready. How’s yours?
Best,
Alex