Tech Stocks Dump as Small-Caps and Cyclicals Ignite

It’s a violent money shift for the ages.

Money is rotating.

In 2026, tech stocks dump as small-caps and cyclicals ignite.

The late great Yogi Berra once said, “You can observe a lot by watching.” He was right.

When it comes to investing, the biggest edge comes from observing the most basic principle: Supply and demand.

Paying attention to where money managers are positioning will deliver more insights than any seductive storyline ever will.

2026 is all about new market leaders. Small-caps have been the runaway winner…at the expense of technology stocks, mainly software names.

Our call to buy small-caps aggressively this year is playing out. Incredibly, yesterday saw one of the largest money rotations in over a year.

Today’s message will alert you to the monumental money shift occurring beneath the surface.

Tech Stocks Dump as Small-Caps and Cyclicals Ignite

If all you do is stare at the S&P 500 and NASDAQ, you’re missing out.

One look at major indices reveals how 2026 is shaping up quite differently than recent years.

The large-cap S&P 500 is up .5% while the NASDAQ is down 1.5%. Small and mid-caps are booming.

The S&P Small Cap 600 has jumped 7.5% while the S&P Mid Cap 400 is up 5.8%.

This is what a classic rotation looks like:

If your portfolio is constructed heavily in Mag 7 names and software stocks, you’re likely feeling glum. On the flipside, if you’re holding cyclical and small-caps, you’re a happy camper.

Let’s dive down into what’s really happening, using our MoneyFlows lens.

Yesterday was significant.

Our data recorded the largest inflow day in well over a year. A massive 333 stocks saw green flows while 122 stocks were red:

While many saw red on their screens yesterday…we saw the opposite. Peeling back our flows by market cap reveals that money is chasing small and mid-caps:

You really can learn a lot by observing!

Let’s keep going.

Certain groups are getting sold hard while others are booming. In this graph, I took the last 2 days of data and plotted flows by sector.

Notably, heavy cyclical inflows were seen in Energy, Materials, Financials, and Industrials.

The pain was squarely in technology stocks as 45% of all outflows hit the group:

But what about asset classes?  Check out our ETF data, which tells a very clear story.

Money is chasing small-caps and cyclicals and leaving highly leveraged crypto funds and tech stocks.

Data is beautiful…especially when you know how to profit off of these moves.

Each day, PRO members can spot stock flows, sorted by MAP Score. This allows you to understand our biggest themes and trends.

Take Woodward (WWD) as an example. The $23 billion-dollar industrial company has been beaming with institutional support since the summer.

Each of these blue lines indicates the times when WWD was one of our highest rated stock ideas on our weekly Outlier 20 report:

That’s the stairway to heaven! All of our outlier stocks have these traits.

Let’s do another in the precious metals space. We all know gold has been a hot commodity.

Wheaton Precious Metals (WPM) is a $63 billion streaming company out of Canada. It has been under extreme accumulation all year.

Each of these green bars are discrete inflows pushing the stock higher and higher:

While tech stocks dump, small caps and cyclicals ignite.

I know volatility is unsettling and never fun. Having a plan can help.

Understanding money flow trends allows you to take advantage of massive rotations hidden beneath the surface…EARLY.

You can observe a lot by watching money flows!

Get started today.

Become a PRO subscriber today and gain access to our top stocks each day. You can search flows on the stocks you care about most and gain access to our weekly Outlier 20 report.

Professional money managers and RIAs looking for additional portfolio solutions and unique ETF flow data, please reach out about our Advisor Solution and Emerging Advisor Program.

Lastly, Jason Bodner sat down with growth investor, Louis Navellier to discuss the state of the gold market. It’s a great chat and Louis also revealed his top 5 gold stocks.