Tech Out Front

Good morning. Welcome to Beyond Sie Model. I'm Jack Kosart. This is effective for the week of May 4th, 2026.

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Let's get started. Uh shout out to my uh Star Wars friends out there. Uh may the may the fourth be with you. Um but uh

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getting started. Technology, materials, energy are received signals for this week. Um technology showing uh quite a

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bit of strength here. Um number four ranking overall uh two on the trading week, one tactical month, one on the strategic quarter. Uh materials kind of

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limping in here with a strong tactical month. Um lighter scores on the strategic quarter and the trading week.

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Overall score of 13 and uh energy having an interesting uh interesting sandwich here with one on the trading week, two

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on the strategic quarter, and 11 on the tactical month for an overall score of 14. Um, seeing healthc care here toward

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the bottom and financials showing a little bit of life on the positive skew end of things from 11 to 7 to three. Um,

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I guess the big takeaway here is when we're looking at our heat map, where is the money going? And right now in the trading week, it's technology and

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energy. And holistically across the whole time period, it's really just technology. Uh, this is a technology-led

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rally. Um I actually have uh um real quick uh 32% for uh technology on the

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for number two and.36% for energy. So these kind of neck and neck here and we had an outflow of negative.22%

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for for healthcare. But as you can see here um kind of really highlighting everything else is either neutral or

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slightly red. So you know in terms of strength of the overall economy in terms of how uh how it's looking I you know I

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looked at the sector tractor go se 11 uh the sector tracker going back to last month the only only sector outperforming

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the S&P 500 (SPY) right now is technology um you know and then obvious you could see that from the strong flows and then what

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we have here is the uh sector ETF asset flows uh model percentage of assets invested so if you added if you broke

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down the 11 sector spiders and you kind of divided it up into a pie and said, "Hey, what percentage of the pie is this

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particular sector?" Um, this green one is kind of the one we're really highlighting here and that's technology.

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Um, and it's running away. Assets are flowing very heavily into technology and it's making a larger larger and larger

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port uh portion of that pie um as a part of technology. Now, we're hitting up against uh this goes back to 2016. So,

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we're we're touching up against 10-year highs here that we're kind of looking at. Um, as you can see here, energy had a little bit of a runup correction and

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it's kind of started to turn up the other way. But, uh, this is very much technology-led. You know, the larger portion of the S&P 500 is now coming

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from technology than almost ever before uh or at least in the last 10 years. Um, as as we're starting to approach that

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number. Um just going back to my heat map uh two of the last two of the five days last week were updates

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uh assets under management um 0.59 total 0.59% total increase in the uh total

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assets under management and um we are seeing uh the big day was Thursday with 1% increase.

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Heading into our rainbow charts um we got energy here. energy showing a little bit of life on the relative performance here as we've climbed up uh we had that

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nice strong runup um as energy prices were going up higher uh we declined a little bit on that ceasefire but energy

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prices remained high and uh you know the war in Iran continues to be a bit of a quagmire so uh starting to see those

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energy price uh starting to see the relative performance of those energy companies uh start to kind of creep back up as we've crossed slightly up into

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favored um you know Nice little potential uh place to be here for energy in terms of trying to see if this thing

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can kind of rerally after having that big move from uh late December all the way through March.

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Technology uh technology set up as high as it can be or almost as high as it can be uh with overall score of four but

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sitting up in that upper favor is what you like to see. Nice strong runup in the relative performance versus SPY. uh technology's been uh really leading the market.

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Uh materials uh materials is a bit sideways here. You know uh it is our second rank sector but again when we

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bring up that heat map and kind of look at what's going on here um you know we've been rotating outside of technology been really rotating through a lot of different sectors. I think

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what's you know um obviously AI is a really strong uh important part of this economy a lot of the capex expenditures

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on um are coming out of AI and a lot of the the multiples and you know exciting revenues are starting to materialize at

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the AI companies. So technology is leading the leading the pack but prior to technology coming up you know it

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looked like the market was getting ready to roll over. Um, so we'll see what happens here, but a lot of, you know, trying to find what this next sector is

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going to do, the next one that's going to kind of make that run. Uh, as of right now, I'm not seeing a lot of assets coming through. You know, obviously, uh, financials third on the

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trading week, and that's negative, uh, 002. So, effectively zero flat on the week, and that's three. So, uh,

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investors very much focused on technology u putting a little bit of faith into energy, but outside of that, we're not seeing it. So we're that's why

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we end up seeing things like we're seeing with materials. You know, it is sitting in lower favored um relatively underperforming a little bit on the

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broader market overall on an uptrend going back to October of last year. So we're still kind of trending in that right direction broadly. Uh but seeing a

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little bit of a downturn here. Um, but yeah, the SE model, it's it's attempting to find what's next and it's not always

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going to be where, you know, the top three have all of the assets flowing into the top three and the relative performance looks great for all three

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charts. Um, there are times, uh, where we have a clear leader of the pack.

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Right now, that's technology and we're trying to find what's next. We want to get what u, you know, the seat model is trying to find where the money is going.

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Um and that's not always at the strongest you know for materials negative.04 on the trading week again effectively zero. Um and then you know

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having not strong accumulation across the board. So uh technology looks to be the top one. question we get all the

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time though too is um you know why why wouldn't we just be 100% invested in technology then if we're seeing a little

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bit of you know flows or in this case this week you know why are we not just in energy and and technology and get rid

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of materials when it's it's flat here on the trading week and close to flat here on the tactical month. Um the the broader answer is, you know, we did a

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lot of back testing. You know, we don't know what the next because we're not forecasting because we're not sitting there and trying to

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pick out every individual revenue or what's what's going to be the next hot sector. We're really just tracking uh the velocity of money going through the

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11 sector spiders. Um we don't know what's going to take off next. Um you know we have an idea that we you know as the the better the flows are the

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stronger the momentum of the flows over the three time periods that we tend to get relative outperformance. Uh you know we can see little pockets of here of you

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know that favored seeing nice relative out performance but again we're we're middling here. Um so you just trying we just don't know what's going to happen

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next. You know that we could bounce off this support and materials could take off um or it continue to crash down through into neutral and we'll pick up

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the next sector. But we want to try to catch those sectors on the turns. And as we do that, that could end up causing

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some of the sectors to kind of um filter through as we're trying to find that next next nice nice turn. Uh last but

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certainly least, we have healthcare sitting down and avoid uh since we've crashed through uh avoid you uh back looks like in uh the beginning part of

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March. You know, we've had a nice strong downtrend here in healthcare. um starting to near that uh that base level. Uh we kind of broke through a

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little bit here, but you know, smidgen of a turn up on the relative out performance versus SPY, but still still down. Uh nothing to do here. Healthcare

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is at the bottom. That is all I have for this week. I look forward to breaking down with you all next week and thank you.

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