The Great Rotation: Why This Week Could Trigger the 2026 Melt-Up
They say the market is designed to get rid of the weak-minded and low-conviction participants right before the biggest moves. If you’ve felt the stalemate of the last eleven months—watching crypto trade flat while Mag 7 sucked the air out of the room—congratulations. You’ve survived the shakeout.
We are standing at the edge of a massive structural turning point. The macro signals aren’t just whispering; they are screaming. From the geopolitical “risk chess” moves in Venezuela and Greenland to a domestic policy shift that is effectively a “forced” risk-on environment, the stage is set.
Monday morning starts a window where Time, Cycles, and Liquidity all converge. Here is why we are about to see the biggest move in risk in half a decade.
The “By Any Means Necessary” Economy
The American consumer is being set up to feel richer before the midterms. The hits are coming fast, and they are all designed to inject liquidity and force capital out of “safety” and into “risk.”
The Housing Shock: Trump’s directive for the government (via Fannie and Freddie) to buy $200 billion in mortgage bonds is a massive signal. It’s a direct attempt to force rates down and unstick the housing market.
The War on Institutional Hoarding: By moving to block BlackRock and other mega-corps from buying single-family homes, the administration is clearing the path for the “American Dream” to resurface.
Capping the Rent-Seekers: Capping credit card interest rates and defense company stock buybacks/dividends isn’t just populism—it’s a reallocation of capital. If defense contractors can’t buy back their own stock, that money has to go into production, R&D, and eventually, the broader market.
Geopolitical Risk Chess: Securing the Future
While the headlines focus on the “aggression and fear,” the market sees the securing of assets.
Venezuela & Oil: The US just covertly secured the largest oil reserves in the world. Trump’s goal? Secure and Lower energy costs = higher disposable income = higher risk appetite.
The Greenland Play: Whether it’s the “easy way” or the “hard way,” the move for Greenland would be the largest land deal in history. It’s about resources, minerals, and security. Buying Greenland outright would be a massive government expenditure.
Military Spending: A 75% increase in military spending ($500 billion) is a massive liquidity injection into the industrial complex and more proof that you don’t need QE from the fed for money to enter the system.
The Chart of a Generation: IWM vs. SPX
Look at the IWM/SPX chart. We are looking at a 25-year double bottom culminating with a massive signal candle. Zoom in further, and the 4.5-year downtrend looks identical to the Alt/BTC charts right before they explode.
Russell 2000 vs SPX and Nasdaq
Russell 2000 vs SPX and Alt Coins vs BTC
The Data Doesn’t Lie:
Russell 2000 (IWM): GS projects EPS +67% this year. Earnings growth drives stock prices. Period.
Early Leaders Continue Winning: IWM and BTC are leading the year (+5.7% for IWM already). Tech and the Mag 7 are the laggards. This is the Great Rotation we’ve been calling for months.
The Meme Tell: Subtle tells like AMC popping and KSS (Kohl’s) quietly leading are the “canaries in the coal mine.” When the laggards of the 5-year cycle start moving, the animal spirits are officially back
Why Next Week Could Change Everything
If you don’t understand Time, you are missing half the picture. We are entering a 180-degree window from the July meme coin tops, landing us right on January 12th.
The Anniversary Effect: January 12th is the 5-year anniversary of the 2021 GME squeeze.
The Degree Date: It is exactly 720 days (360 x 2) from the all-time low of the IBIT (Bitcoin ETF).
The Regulatory Catalyst: The Crypto Market Structure Bill is set to pass in this exact window which just so happens to be 180 days from the passing of the GENIUS act.
In 2024, it was the BTC ETF launch. In 2025, it was the “Crypto President” inauguration. In 2026, it’s the legal framework for Alt coins.
Major anniversary dates coinciding with key cycle times. The pattern is perfect.
The Verdict: Crypto Will Outperform Mag 7
The “Forest for the Trees” problem is real. People are chasing Gold and Silver because they are scared, but they are missing the fact that BTC was the only major asset in the red last year.
In a world of $200B housing injections, $500B military hikes, and aggressive rate drops, liquidity is no longer the problem.
The problem is positioning. As small caps and alts start to move, the “chase” will begin. People will stop looking for “safety” and start looking for beta. We are in the 90-week window—the same one that triggered the real move after the 2020 Covid crash. The “Wheel within the Wheel” is turning.
Risk is not just a line on a chart; it’s a regime that permeates the collective mindset. With high-stakes geopolitical moves in motion, societal behavior is soon to follow—and that shift will manifest in the markets sooner than most expect.
The time to take risk is when no one else is. That time is now.