The account fell 4.9% this week against 2.7% for the S&P, as chip stocks had their worst week since April 2025.
Since the growth mix went in on Oct 29 the account trails the S&P by 1.6 points: about 1.2 from moving more than the market and 1.4 from holding more chip stocks, with cash waiting to be reinvested cushioning about 1.0 (account closes; Yahoo). Since our Sep 24 start: -6.8% against -4.1% for the S&P.
- Thursday's morning run crashed; its rerun sold the Nasdaq-100 fund for a tax loss 46 minutes later than planned, at a price 1.2% lower. Cost: about 0.25% of the account.
- Wednesday's evening research run died, so no company memo was written that day. Cost: 0 pts (nothing traded on it).
- The test that decides whether to switch back to our original funds was set up on Saturday in a format our own checker rejects. Fixed Sunday after an independent review. Cost: 0 pts.
The account vs the market
Trades this week
Every trade →| Date | Side | Fund | Size | Price | Why |
|---|---|---|---|---|---|
| Nov 2 | SELL | SPMO S&P 500 momentum | 4.5% | $135.40 | tax-loss harvest; momentum leg moved to a near-identical fund |
| Nov 2 | BUY | MTUM US momentum | 15.7% | $281.82 | move to the growth mix: momentum leg (near-identical to the harvested fund) |
| Nov 2 | BUY | QQQM Nasdaq-100 | 20.2% | $286.12 | move to the growth mix: Nasdaq leg |
| Nov 2 | BUY | SCHX US large caps | 5.4% | $29.91 | stock-picking slice: unfilled slots parked in the S&P fund |
| Nov 2 | BUY | TSM TSMC | 2.4% | $405.06 | stock-picking slice buy |
| Nov 3 | BUY | MTUM US momentum | 4.6% | $279.04 | tax-loss swap into a near-identical fund |
| Nov 5 | SELL | QQQM Nasdaq-100 | 20.0% | $270.50 | tax-loss harvest; swap into a near-identical fund after settlement |
| Nov 6 | SELL | SCHX US large caps | 19.2% | $29.11 | Sold about 3% under cost to bank the tax loss; the cash buys a near-identical large-company fund (IWB) on Monday. |
| Nov 6 | BUY | ONEQ Nasdaq Composite | 19.8% | $97.71 | Bought a whole-Nasdaq fund with the cash from Thursday's tax-loss sale of the Nasdaq-100 fund, to stay invested while the 30-day wash-sale window runs. |
Size is the trade as a share of the account at that day's close. Price is the average fill.
What moved the market
What drove the week
Tuesday's midterm elections gave Democrats both chambers of Congress, and investors read that as tighter oversight of the AI data-center build-out. Most data-center ballot measures passed and Texas elected a governor who wants a moratorium (AP, Reuters). On Thursday the S&P fell 4.4%, its worst day since April 4, 2025, and the chip fund SMH fell 11.2%, its worst since March 16, 2020 (Yahoo daily closes). A strong October jobs report on Friday (+165,000 against about 65,000 expected; Schwab) brought only a partial bounce.
How the parts of the market moved this week
Why
- Money left the AI build-out for the rest of the market. Over the past month the average S&P stock beat the index by 7.3%, and health care (+9.9%) and staples (+8.0%) rose while chips fell 23.6% (market map, 1 month to Nov 6).
- Lenders noticed. The junk-bond spread rose to 3.48 points over Treasuries on Nov 5 from 3.18 on Oct 27 (ICE via FRED and FXStreet), and junk bonds trail Treasuries by 2.5% over a month (market map). Lenders fund the data-center build, so this is where an AI slowdown would spread.
- Energy stocks fell 12.0% on the week while oil was roughly flat over the month (-0.3%, market map). We found no sourced explanation, so we draw no conclusion from it.
- Fear stayed high: the VIX ended the week at 25.6, above the 25 line we watch (market map).
Next week
TSM reports its October sales around Nov 10. Two names on our watch list report: Affiliated Managers on Nov 9 and Venture Global on Nov 10 (earnings calendar, TraderHub). NVDA reports on Nov 17. The next Fed decision is Dec 9, where futures price about 79% odds of a quarter-point hike (CME fed funds futures, Nov 6).
The market by sector
16 sector and region funds, total return as of the Nov 6 close. Strongest first.
How the pieces connect
- The AI build-out was the fault line. Chips fell 11.2% and tech 8.2% on the week while communication services rose 4.9% and real estate 1.9% (market map). Over a month the average stock leads the S&P by 7.3%, so this was a rotation inside stocks, not a flight from them.
- Rates did not cause it. The 10-year yield ended at 4.86%, below where it was a month ago (market map), even with a December Fed hike still priced at about 79% (CME).
- Credit is the line between an AI correction and a broader one. The junk-bond spread is 0.52 points below the 4.00 level where we would re-examine the plan; it rose 0.30 points in seven sessions.
- The account moves about 1.26x the S&P (252-day beta, Yahoo) and holds more chip stocks than the S&P (about 22% against 16%, counting what the funds hold). It falls more on days like Thursday and rises more on days like Friday, by design.
| Link | Direction | 1 month | Trend |
|---|---|---|---|
| Chips vs the S&P Is the AI trade leading or cracking? | −19.6% | falling | |
| Average stock vs the S&P Broad rally, or a few giants carrying it? | +7.3% | rising | |
| Cyclicals vs defensives What investors expect from the economy | −2.5% | falling | |
| Junk bonds vs Treasuries Credit stress usually shows here first | −2.5% | falling | |
| Small vs large companies Sensitivity to rates and credit | +3.8% | rising | |
| Copper vs gold Growth vs fear; tends to track yields | −2.2% | falling |
Rates, dollar, commodities, fear
Early warning: 4 of 8 red
Information, not trade rules. Backtested 2000 to 2026: stepping aside when the chip light turns red lost 3.4 to 6.0 points a year after tax vs holding; half its alarms were false.
What the map says we can do
- Hold the growth mix through the red lights. Four of eight are red, but stepping aside on them lost 3.4 to 6.0 points a year after tax (a test we ran; failed).
- Tax losses: the momentum fund sits 9.3% under cost, about 2% of the account. From Dec 3 the daily check can harvest it into a near-identical fund (a rule in force since Oct 23; tax mechanics, not a return bet).
- Switch the Nasdaq fund back to the Nasdaq-100 version on or after Dec 7 (a test we ran; passed, +0.3 pts a year after tax).
- HALO at $100 or lower clears our bar for the stock-picking slice (closed $103.63). The slice stays at 7.5% of the account because a test we ran found its edge has faded since 2011.
The account at the close
| Holding | Weight | Day | Pts |
|---|---|---|---|
| ONEQ Nasdaq Composite | 19.6% | +1.1% | +0.21 |
| MTUM US momentum | 19.1% | +1.8% | +0.33 |
| VOO S&P 500 | 17.5% | +0.3% | +0.06 |
| IEMG Emerging markets | 6.8% | +2.1% | +0.14 |
| RSP S&P 500 equal weight | 6.8% | −0.4% | −0.03 |
| IEFA Developed markets ex-US | 5.1% | −0.7% | −0.04 |
| NVDA Nvidia | 3.2% | +2.8% | +0.09 |
| TSM TSMC | 2.3% | +6.3% | +0.14 |
| Cash Settling or waiting to be invested | 19.5% | ||
| Trades, fees and cash today | −0.20 | ||
Rules and how close they are
| Rule | Fires at | Now | |
|---|---|---|---|
| NVDA automatic sell line | $155.48 | $186.64; fires after a further 16.7% fall | watch |
| Re-check any holding at -25% from cost | −25% | NVDA −16.0%, MTUM −9.3%, TSM −7.3% | watch |
| Junk-bond spread (credit stress) | 4.00 | 3.48 on Nov 5; fires after a further 0.52-point rise | watch |
| Account review: trails the S&P by 5.5 pts over 6 months | 5.5 pts | 4.9 pts with today's mix (May 6 to Nov 6, Yahoo) | watch |
| Account review: value floor | 11.6% below today | fires after a further 11.6% fall | clear |
| Nasdaq-100 trailing the S&P over 6 months | 15 pts | 6.2 pts (May 6 to Nov 6, Yahoo) | clear |
| Dollar up over 6 months | +5% | +0.9% | clear |
| Nasdaq fund (ONEQ) or momentum fund (MTUM) above 25% of the account | 25% | 19.6% and 19.1% | clear |
| Any single foreign fund above 18% | 18% | 6.8% (IEMG) | clear |
Research
A test we ran: switch back to the original funds after the tax-loss sales?
Nasdaq: switch back from Dec 7. Momentum: keep the substitute.In early November we sold two funds at a loss for the tax benefit and parked the money in close substitutes: a fund of the whole Nasdaq instead of the Nasdaq-100 fund, and a different momentum fund. We tested, after tax, whether to switch back once the 30-day wash-sale windows end. The Nasdaq-100 version was ahead by about 0.3 points a year in 2015-2026 and in 2004-2026, in both halves of each period, so we switch back on or after Dec 7 as long as the sale does not realize a meaningful gain. The original momentum fund led by 0.6 points a year overall, but all of that came after 2021 and it trailed before, so we keep the substitute. The same test found a US-only mix ahead of ours by 0.6 points a year after tax since 1996, but most of its edge in 1975-95 was rebalancing tax, so it waits for our January review. And our exit rule for single stocks would sell a stock with no real edge 84% of the time within two years (an alternative cuts that to 32% but catches only half of the truly bad ones), so position size, not that rule, is what limits single-stock risk.
Next week
- Monday 08:45: buy IWB (a near-identical large-company fund replacing SCHX) with the cash from Friday's tax-loss sale, about 19% of the account, once it settles. Then the daily tax-loss check.
- Mon Nov 9: Affiliated Managers reports. Tue Nov 10: Venture Global reports; TSM's October sales around the same day.
- Nov 17: NVDA reports. Nov 23: the wash-sale window on VOO and two foreign funds ends. Nov 30: month-end count for the equal-weight signal.
- Dec 3: the momentum fund's loss can be harvested again. Dec 7: switch the Nasdaq fund back to the Nasdaq-100 version (gated on a small or no gain). Dec 9: Fed decision.
Sources: Robinhood (account, closes, orders), Yahoo Finance (daily and weekly closes), ICE via FRED and FXStreet (junk-bond spread), CME fed funds futures, TraderHub (earnings calendar), Ken French data library (tests), AP, Reuters, Schwab.