“The real key to making money in stocks is not to get scared out of them.”

Peter Lynch

Last week, we asked a simple question: was the rebound a durable move… or just a reflex rally within a fragile structure?

This week, the market has given us an answer.

Take a look at the charts. They tell the story clearly enough. The pattern we have been highlighting (and, yes, predicting) over the past month and a half has now played out.

The S&P 500 not only held the key levels we were monitoring… it has surged back to all-time highs.

The T.A.C.O. hypothesis was not just a narrative framework. It was the mechanism. As financial conditions tightened (equities threatening to break down and long-term yields beginning to push higher) the political response followed.

The ceasefire served as a pressure valve. And once that valve was opened, markets did what they tend to do in these environments: they moved fast… and they moved hard.

But the most important point here is not that the hypothesis we shared across our product roster proved correct.

It is what we did with it. Because throughout the entire duration of this episode... while the risk-off wave intensified, while sentiment deteriorated, and while both professional and retail investors were selling in size... we did the opposite.

We increased our Model Portfolio’s overweight in equities.

And we did so in what were, at the time, deeply contrarian areas of the market. Geographically, we leaned hard into the United States. From a sector perspective, we tilted toward disruptive technology... precisely the long duration assets investors were most afraid of at the time.

That positioning is now beginning to speak for itself. The two positions we added during that period are already delivering returns that would normally take far longer to materialize. One is up approximately 18% from our entry.

The other is now trading roughly 28% above where we initiated the position.

We do not view that as luck. It is what happens when a framework, an investment process, and the fortitude to act are all aligned. Nor do we view this as a victory lap. If anything, it is a reminder of how these opportunities tend to appear: not when the narrative is comfortable… but when the pressure is highest and the consensus is leaning the wrong way.

And that brings us to the current setup.

Because while the index is now making new highs, the underlying environment remains far from resolved. The geopolitical backdrop is still fragile. The structural tensions we have been highlighting have not disappeared. And, as always, markets have a tendency to move ahead of clarity.

Which means the work does not end here.
If anything, it is just beginning.

Stay close to our work.

Good investing!
Vasco Marques de Freitas, CFA, CMT

You might also like reading

Disclaimer

The information provided herein is for general informational purposes only and does not constitute financial advice or a recommendation to buy, sell, or hold any investment. It is not tailored to any specific individual or investor profile. All investments involve risks, and past performance is not indicative of future results. Before making any investment decisions, it is important to consider your own financial situation and risk tolerance. We do not guarantee the accuracy, completeness, or reliability of any information provided, and we disclaim any liability for any loss or damage arising from reliance on the information herein. Readers are advised to consult with an authorized financial intermediary before making any investment decisions.

“In war, the first casualty is truth.”

Aeschylus

We waited one more day to publish this update.

And the reason is simple. We wanted more clarity… more color… on the evolving negotiations between American and Iranian authorities regarding the current conflict. In moments like this, the sequence of events matters just as much as the events themselves.

As you know, over the past few weeks we have been expecting some form of a TACO from the Trump administration. And, to a certain extent, it has already been delivered.

The two-week ceasefire, announced just as the S&P 500 was threatening to break down and long-term U.S. government bond yields were beginning to push higher, was not coincidental.

It was a response to tightening financial conditions and rising political pressure.

And markets reacted accordingly. Risk assets rebounded sharply, volatility compressed, and the immediate downside pressure eased.

That is what a TACO looks like in practice.

But as we sit here on Sunday afternoon, the situation remains unresolved.

There is still no durable agreement on the table.

And the Strait of Hormuz remains the central issue, not just for energy markets, but for the global economy more broadly. In other words, while the initial pressure valve has been released… the system has not yet been stabilized.

Which brings us to the current setup.

We believe this week’s price action will be particularly telling. Markets now have to digest a more complex reality: a partial de-escalation without a lasting resolution...

The key question is whether the recent rebound was the beginning of a more durable move… or simply a reflex rally within a still fragile structure. From a technical perspective, the levels just below the S&P 500 now matter even more. If they hold, the market may continue to build on the recent recovery. If they fail, we could quickly find ourselves back in a much more disorderly environment.

We are watching this closely.

Because beyond the short-term volatility, what matters most is that our pipeline of opportunities continues to deepen. Dislocations like these rarely come alone. They tend to cluster. And when they do, they create the kind of setups that define entire vintages of returns.

Stay close to our work.

Good investing!

Vasco Marques de Freitas, CFA, CMT

Disclaimer

The information provided herein is for general informational purposes only and does not constitute financial advice or a recommendation to buy, sell, or hold any investment. It is not tailored to any specific individual or investor profile. All investments involve risks, and past performance is not indicative of future results. Before making any investment decisions, it is important to consider your own financial situation and risk tolerance. We do not guarantee the accuracy, completeness, or reliability of any information provided, and we disclaim any liability for any loss or damage arising from reliance on the information herein. Readers are advised to consult with an authorized financial intermediary before making any investment decisions.

What if this is just Groundhog Day all over again?

Over the past week, investors have continued to grapple with the same central fear we highlighted in our last note: that the war with Iran, through its impact on energy prices, could tighten financial conditions further, deepen the ongoing risk-off wave, and push the market into a much more disorderly correction.

That risk remains very much alive.

In fact, despite some attempts by the Trump administration to soften its tone and scale down the conflict, Iran has shown little willingness to cooperate.

So, while we still believe the political incentive for another T.A.C.O. remains strong, the path toward de-escalation is proving neither immediate nor straightforward.

Still, the most important chart to watch right now may not be oil... but the S&P 500 itself. Take a look at the chart below.

As you can see, the current pattern is beginning to look eerily similar to the Liberation Day debacle of 2025, the episode that ultimately culminated in a major Trump pivot from Main Street to Wall Street.

Back then, the market rolled over, lost momentum, broke down, and eventually forced a response.

Today, we see a very similar setup unfolding once again: the index has broken below its 200-day moving average, momentum has deteriorated materially, and RSI is now revisiting oversold territory. In other words, we may once again be approaching the zone where financial markets begin to exert much greater political pressure.

And that level matters.

Historically, once the S&P 500 loses its 200-day moving average, the character of the tape can change quickly.

Volatility tends to expand, downside moves can accelerate, and investors begin to pay much closer attention to all the things they were previously willing to ignore. Add to that the fact that we are in a midterm year, which historically has not been especially kind to equity returns, and we believe it is highly unlikely that the Trump administration is oblivious to the risks associated with allowing this drawdown to deepen much further. So, our working hypothesis remains intact:

Trump will continue to press for a T.A.C.O.

In fact, if anything, the bar is now even lower for positive surprises. Sentiment is poor, the technical damage is mounting, and the market is increasingly leaning toward a more persistent and economically damaging conflict.

That is precisely why any credible signal of de-escalation, however imperfect, could still have an outsized impact on asset prices. We may be early once again... but for now, we continue to believe that the political, market, and economic incentives are all pushing in the same direction.

Meanwhile, while the broader risk-off wave continues to ravage financial markets, several pockets of relative and absolute strength remain visible in our Model Portfolios. Most notably, our overweight in energy equities continues to behave exactly as one would expect in this new market regime... as a true diversifier.

We will enter our Spring publishing break next week, and you can expect your next monthly issue on April 10.

Good investing!

Vasco Marques de Freitas, CFA, CMT

Disclaimer

The information provided herein is for general informational purposes only and does not constitute financial advice or a recommendation to buy, sell, or hold any investment. It is not tailored to any specific individual or investor profile. All investments involve risks, and past performance is not indicative of future results. Before making any investment decisions, it is important to consider your own financial situation and risk tolerance. We do not guarantee the accuracy, completeness, or reliability of any information provided, and we disclaim any liability for any loss or damage arising from reliance on the information herein. Readers are advised to consult with an authorized financial intermediary before making any investment decisions.

What a difference a month makes.

Not long ago, investors were still debating whether the next move would be a soft-landing melt-up or a healthy consolidation.

Now the market is gripped by something far uglier: a vicious risk-off wave triggered by the latest Trumpquake... the war with Iran.

Over the past week, the conflict has escalated materially, energy infrastructure has taken fresh hits, additional U.S. forces are heading into the region, and the market has moved from assuming a short, containable episode to pricing a more protracted confrontation.

Oil, of course, is reacting accordingly.

But the important point is that this is not just a front-month panic.

The message from both Brent and WTI is that the market is increasingly pricing a disruption that will not be solved in a matter of days.

Brent settled this week at $112.19, its highest since July 2022, while WTI’s active contract closed near $98.23... traders, strategists, and even the IMF are all now framing the duration of the conflict as the key variable for growth, inflation, and monetary policy.

Pictet’s own framework is consistent with that interpretation: the initial pattern is an inflation shock followed by broad portfolio de-risking, while its economists note that a permanent 30% oil shock would lift inflation and drag GDP.

And that is precisely why equity markets are responding so negatively.

Higher oil prices are now large enough to revive a very old fear: that what starts as an energy shock quickly mutates into a growth shock.

JPMorgan has warned that stock/oil correlations typically turn much more negative after roughly a 30% oil spike, and that four of the last five major oil shocks since the 1970s were followed by recession.

But here is where we begin to diverge from the consensus.

As you know, we have been arguing that the bar is now low for positive surprises... in growth, in liquidity, and yes, even in inflation.

These weekly notes are not the place for a full exposition, we will save that for the monthly issues.

But consider the setup.

Gasoline prices have surged by nearly $1 per gallon since the war began. 55% of Americans already say rising fuel costs are hurting their household finances.

Trump’s approval on the cost of living has fallen to 29%, and only 35% approve of his handling of the economy. Meanwhile, the administration is already reaching for relief valves: it has lent 45.2 million barrels from the SPR and is discussing more measures to cap the damage.

The market is also flashing stress: the S&P 500 has now logged a fourth straight weekly decline, hit a six month low, and slipped below its 200-day moving average for the first time since the Liberation Day debacle.

So, here is our working hypothesis: we believe we are moving toward another T.A.C.O. moment... another moment when Trump, faced with rising gasoline prices, rising yields, a stumbling stock market, and a politically costly war, tries to frame the mission as accomplished and pivot toward de-escalation.

Reuters reports that some White House aides are already urging him to find an “off-ramp,” and that declaring victory and walking away is one of the live options now on the table.

That is a contrarian call, because sentiment is already deeply pessimistic and the market is increasingly leaning the other way. We may be early... but we will be here to stand accountable for the claim.

Good investing!

Vasco Marques de Freitas, CFA, CMT

Disclaimer

The information provided herein is for general informational purposes only and does not constitute financial advice or a recommendation to buy, sell, or hold any investment. It is not tailored to any specific individual or investor profile. All investments involve risks, and past performance is not indicative of future results. Before making any investment decisions, it is important to consider your own financial situation and risk tolerance. We do not guarantee the accuracy, completeness, or reliability of any information provided, and we disclaim any liability for any loss or damage arising from reliance on the information herein. Readers are advised to consult with an authorized financial intermediary before making any investment decisions.

But as we argued in the latest monthly issue of VMF’s Strategic Asset Allocation, the bar is now very low for positive surprises.

And that matters.

Because when positioning is defensive, sentiment is fragile, and expectations have been pushed down far enough, it often takes far less good news than people imagine to trigger a meaningful move in the other direction.

That potential rebound could also come with an added layer of comfort: the S&P 500 is approaching an important support zone.

And when you go one level deeper, breaking the index down by sector, the message becomes even clearer.

Several of the market’s larger sectors are also now trading near support, which suggests that this is not just an index-level technical observation.

It is a broader market condition.

At that same sector level, the current leadership is also telling.

Energy has been leading, which is hardly surprising given the geopolitical events unfolding before our eyes.

But alongside that, the market has also been rotating into more defensive groups, particularly consumer staples and utilities.

That is usually what investors do when they want exposure, but want it with a helmet on...

And yet, we continue to stand by the claim that the bar for positive surprises is low. In fact, that view is reinforced by what is happening in the realm of implied volatility, and particularly in the VIX.

As you can see in the chart, the VIX has not only printed lower highs relative to last year’s Liberation Day episode, but the candlestick pattern surrounding both events is also notable.

In both cases, we see a dark cloud cover pattern emerging... a setup that could point to lower volatility in the weeks ahead, which in turn would be consistent with higher equity prices.

Still, we do not expect the next risk-on wave to look exactly like the last one.

In fact, we suspect it may come with an important rotation in relative strength... across geographies, sectors, and risk factors.

And if the Dollar pattern is any guide, that next phase may well prove more favorable to the U.S. than many currently expect.

Stay tuned.

Good investing!

Vasco Marques de Freitas, CFA, CMT

You might also like reading:

Check our Leaderboard updates - Top 10 Positions - February 18th, 2026

Disclaimer

The information provided herein is for general informational purposes only and does not constitute financial advice or a recommendation to buy, sell, or hold any investment. It is not tailored to any specific individual or investor profile. All investments involve risks, and past performance is not indicative of future results. Before making any investment decisions, it is important to consider your own financial situation and risk tolerance. We do not guarantee the accuracy, completeness, or reliability of any information provided, and we disclaim any liability for any loss or damage arising from reliance on the information herein. Readers are advised to consult with an authorized financial intermediary before making any investment decisions.

Long before this latest Middle East shock hit the front pages, we were already positioned for it.

Back in our December 2025 Alpha Tier issue, we called energy “the quintessential contrarian trade” for 2026. At the time, that was not the comfortable call. It was the kind of call that makes people raise an eyebrow when you publish it… and nod after the market does the talking for you.

Well, the market is talking now.

So today I’m sharing something different. Not a polished monthly essay written with the benefit of hindsight. But the actual Weekly Update our subscribers receive inside VMF’s Strategic Asset Allocation when markets are moving fast, headlines are flying, and portfolios need to be read in real time.

That’s the point of these updates.

They show subscribers what matters, what doesn’t, what the market is quietly signaling beneath the noise, and how those signals are affecting our Model Portfolio as events unfold.

The update below, dated March 7, came after a week in which geopolitics hit global markets like a sledgehammer. Oil surged, of course. But so did the consequences across bonds, currencies, equities, and inflation expectations. And in moments like this, the edge is not reacting faster to headlines. The edge is having the right framework before the headlines hit.

Here is the latest Tier One Weekly Update.

It was a risk-off week across global financial markets, and the catalyst needs no elaborate introduction: the U.S. & Israel attack on Iran sent shockwaves not only through the obvious place, oil, but across currencies, bonds, equities, and inflation expectations as well.

Still, our Model Portfolio continues to show several pockets of strength… and one above all: our overweight in the energy sector.

That has become the clearest vindication of a call we made back in December 2025, when we described energy in Alpha Tier as the “quintessential contrarian trade.”

At the time, the consensus was still leaning the other way. Even J.P. Morgan was laying out a path in which Brent could sink into the low $30s by the end of 2027.

Fast forward to Friday, and Brent closed around $93.60 while WTI ended near $91.62. That is no tjust a move. That is a message.

But amid all the media frenzy (and, frankly, all the noise) it helps to listen to what the market itself is saying.

And right now the message is remarkably clear: the Brent forward curve is in deep backwardation.

That matters because the curve is telling us something very specific: the stress is in the present, not yet in the distant future.

The market is paying a steep premium for barrels available now, while prices further out remain far more restrained. In fact, even after this week’s surge,

Brent for delivery at the back end of 2026 is still only a little above $70.

In plain English: oil for immediate delivery has become dramatically more expensive, but the market is still not convinced this will evolve into a lasting structural shortage.

And that, of course, is the great unknown hanging over markets right now: duration.

Because that is what will determine everything that follows.

How long does this war last? What does it mean for inflation?

Does it alter the path of monetary policy at all?

And how far do the consequences spread across broader value and supply chains... not only in oil, but in LNG, fertilizers, and other critical inputs that depend on flows through Hormuz?

Those are not peripheral questions...

They are the macro questions now.

We’ll address all of them in our next monthly issue, due next Friday, March 13.

For now, what matters is that our energy sector play continues to press new highs... the natural consequence of a well constructed Model Portfolio and a Strategic Asset Allocation tuned for a Fourth Turning world.

Sometimes the market tests your patience first.

And then it rewards your conviction.

Good investing!

Vasco Marques de Freitas, CFA, CMT

You might also like reading:

Check our Leaderboard updates - Top 10 Positions - February 18th, 2026

Looking for where to start?

Disclaimer

The information provided herein is for general informational purposes only and does not constitute financial advice or a recommendation to buy, sell, or hold any investment. It is not tailored to any specific individual or investor profile. All investments involve risks, and past performance is not indicative of future results. Before making any investment decisions, it is important to consider your own financial situation and risk tolerance. We do not guarantee the accuracy, completeness, or reliability of any information provided, and we disclaim any liability for any loss or damage arising from reliance on the information herein. Readers are advised to consult with an authorized financial intermediary before making any investment decisions.

Winners keep winning. Losers keep losing. And if you flip to the last page of any of our monthly issues, you already know the punchline: our portfolio is heavily skewed toward the winners’ side.

And right now, nowhere is dispersion more visible than in our geographic tilts.

South Korea (EWY) has turned into a market darling almost overnight because it happens to sit right on top of the AI capex wars. Samsung and SK Hynix aren’t just “AI stories” in the way headlines frame them… they’re the industrial backbone powering the buildout.

When the world decides it needs more compute, more memory, more chips… Korea doesn’t just participate, it supplies. And that’s why capital is flooding in.

Meanwhile, Brazil (EWZ) and Japan (EWJ) are doing almost the same attention-grabbing thing: they’re going parabolic. Different reasons… same result.

Brazil’s thesis, in particular, is now capturing even Stanley Druckenmiller’s attention. Which is always a fun moment… because, well… we were there first.

Stay tuned for our next monthly issue: we’ll update the Brazil thesis properly, with the same sober reality we always bring to these moves: big trends don’t start when the crowd notices; they start when positioning is still lonely.

Now, on the other side of dispersion, our crypto exposure continues to take punches. No sugarcoating it. But our conviction hasn’t budged. Why? Because the market is still missing the obvious: the Agentic AI revolution doesn’t just need intelligence: it needs ownership, coordination, incentives, identity, and settlement in a digital world where agents act, transact, and negotiate at machine speed.

That’s where blockchain stops being a “theme” and starts becoming infrastructure. The connection will look inevitable… right after it stops being controversial.

That’s good investing: you lean into what’s working, you size risk properly, and you stay rational when the market is doing its best impression of a mood swing...

Stay disciplined. Have a great week.

-Vasco

Disclaimer

The information provided herein is for general informational purposes only and does not constitute financial advice or a recommendation to buy, sell, or hold any investment. It is not tailored to any specific individual or investor profile. All investments involve risks, and past performance is not indicative of future results. Before making any investment decisions, it is important to consider your own financial situation and risk tolerance. We do not guarantee the accuracy, completeness, or reliability of any information provided, and we disclaim any liability for any loss or damage arising from reliance on the information herein. Readers are advised to consult with an authorized financial intermediary before making any investment decisions.