THE RADAR
Tech Carnage: Software stocks down 20% YTD. The iShares Software ETF (IGV) just posted its sixth consecutive session of losses. Longest streak this year.
AI Capital Shock: Amazon announces $200B AI spending plan. Stock plunges 9%. Alphabet's $185B capex forecast triggers sector-wide selloff. The market is rejecting the "spend now, profit later" thesis.
Bitcoin Whipsaw: Crashed to $60,062 Thursday. Down 50% from October peak of $126K. Rebounded to $70,411 Friday. $467B evaporated from crypto markets in one week. Liquidations exceeded $2.6B.
Credit Market Whisper: High-yield bonds (HYG) trading at 52-week lows. S&P 500 sits near records. Credit spreads at 2.7%. Well below 20-year average of 4.9%. The divergence is deafening.
Bond Market Stability: 10-year Treasury yield steady at 4.27%. VIX at 16. Near multi-year lows despite equity turbulence. The calm before the liquidity storm.
THE SIGNAL
What Wall Street Isn't Telling You:
Everyone's watching tech stocks crater. We're watching private equity firms.
Shares of Blue Owl, TPG, Ares Management, and KKR plunged double-digits on Tuesday. Fears of exposure to AI-disrupted software companies in their private credit portfolios.
This matters because:
Private credit is the new shadow banking system. $1.5 trillion AUM.
Software companies are overleveraged. Many funded at 2021 valuations.
AI tools like Claude Code are now displacing $150B in annual software spending.
The credit market already prices this risk. Equity investors are just catching up.
The Real Tell: High-yield bonds bifurcating sharply. BB-rated bonds holding steady. Defensive bid intact. But CCC-rated spreads widening fast. This pattern preceded both 2000 and 2008 crashes by 4 to 6 months.
Data Point: Only 1% of long-term holder Bitcoin supply was acquired between $70K and $80K. No support structure exists until $60K to $65K. Bitcoin tested that Thursday. Crypto's "digital gold" narrative is dead. It's now trading as a pure risk-on asset. 0.89 correlation to Nasdaq.
THE VERDICT
RISK: ELEVATED
The market is running a dangerous arbitrage. Equity indices showing strength. Dow hit 50,000 Friday. Credit markets screaming caution. Volatility indicators suppressed. VIX at 16.
This combination has only occurred twice in modern history. March 2000 & October 2007.
What We're Doing With Our Capital:
We're reducing tech exposure by 25 to 40%. Cutting software, cloud infrastructure, and AI plays from our portfolio. These names are 30 to 50% above pre-2024 levels with no earnings support.
We're rotating into quality credit. Our capital is moving into BBB and BB-rated corporates offering yields above 5.5%. Dramatically lower risk than equities at current valuations.
We're holding 15 to 20% cash. Positioned for deployment when VIX spikes above 25. Based on current credit divergence, we expect this within 60 to 90 days.
We've exited cryptocurrency entirely. Bitcoin's failure to hold $70K invalidates all bullish thesis. Next support: $55K. That's the average cost basis for all holders.
We're waiting on real estate. Housing market shifting to buyers' market. Mortgage rates at 6.11% still too high for volume recovery. We're targeting entry points in Q2 2026.
Our Current Positioning:
We're shorting software. We're long BB-rated credit spreads.
Software stocks are pricing in 2027 to 2029 AI productivity gains that may never show up. Meanwhile, high-quality junk bonds offer 5.7% yields. Sub-2% default risk in our models. We're positioned accordingly.
Next Catalyst: Fed Chair Kevin Warsh's first FOMC meeting. March 18 to 19. Any hint of "higher for longer" breaks the AI spending narrative completely.
Bottom Line: The algos are painting your screen green while the smart money rotates into defense. Treasury Secretary Bessent confirmed Wednesday that Treasury has "no authority to stabilize crypto markets." Translation: you're on your own.
The private credit termite problem is real. Software is ground zero.
When credit markets and equity markets disagree, credit is always right.
Data Sources: Bloomberg, Federal Reserve H.15, CoinGecko, Morningstar, FRED, Treasury.gov
Disclaimer: We are not financial advisors. This analysis represents our assessment of publicly available data and market intelligence as of February 09, 2026. All positioning and trading commentary reflects our own research and capital allocation decisions, shared for educational and informational purposes only. This is NOT financial advice. Markets are dynamic. Risks are real. You must conduct your own research and make your own decisions. Consult with a licensed financial advisor before making any investment decisions.
FINVICTA CAPITAL // Data Does Not Lie.