#1 Macro Focus: $IWM (Small Caps)
If I had to pick one area with the most asymmetric upside into 2026, it’s small caps.
4-year breakout structure → potential regime shift if it holds
Rate cuts / easing historically favor smaller companies
When markets flip risk-on, small caps don’t grind higher — they reprice
This is usually where leadership changes.
2026 Core Themes & Sectors
1) Industrials + Clean Power
(ICLN / PSCI / XLI)
Grid buildout + rising energy demand + AI power bottlenecks
This isn’t narrative — it’s physical infrastructure demand
2) Financials: Banks / Fintech / Payments
(XLF / PSCF)
Easier conditions improve operating leverage
Lending, deal flow, and transaction volume tend to re-accelerate
3) Consumer Discretionary
(XLY / PSCD)
If GDP holds and the consumer stays intact, this remains in play
Tariff headlines create volatility — not invalidation
4) Cloud / SaaS / Tech Comeback
(SKYY / XLK)
SaaS was left for dead under the “AI will kill software” narrative
I think 2026 is the rebound year for quality software
5) Infrastructure
(PAVE)
Grid upgrades
Data centers
Nuclear sites
Construction
This is a multi-year capital cycle, not a trade.
6) Materials
(XLB / PSCM)
The picks & shovels of the AI and infrastructure buildout
2025 was strong — but multi-year demand may still be underpriced
7) Communications + Tech Leaders
(XLC / XLK / PSCT)
Trends tend to persist until something forces a reset
I respect leadership as long as the tape allows it
8) Space
(UFO)
Momentum can continue
SpaceX IPO speculation adds fuel
Later-cycle theme — selectivity matters, no chasing.
9) China Tech
(CQQQ + 399006 Index)
Cooling off after the last run
Watching for higher lows and broader participation as confirmation
10) Crypto
(BTC / ETH / SOL / DOGE / XRP)
Too early to call a confirmed full bottom
But if we avoid a major bear market, I believe end-2026 is higher
Risk-on flows tend to rotate aggressively into crypto when conditions ease.
11) Drones & Defense
(SHLD / XAR / PPA)
Defense spending remains a structural tailwind
Drones, autonomy, and modernized warfare aren’t cyclical narratives
ONDS isn’t the only name — and many leaders are extended
If you missed the November pullback, patience matters more than urgency.
Honorable Mentions (Watchlist Only)
Robotics
(ROBO / BOTZ)
Exceptional year already
Expect consolidation before the next leg
I want clean pullbacks, not momentum chasing
Healthcare / Biotech
(XLV / XBI)
Strong second half of 2025
Likely digestion/reset phase
If we get it, this becomes interesting again later in 2026My 2026 Buy List (One Stock Per Theme)
The stocks below are not trades. These are names I’m comfortable accumulating on weakness and holding through volatility if the thesis stays intact.
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