The AI and crypto bubbles are showing cracks — rotate into boring utility stocks
Thesis
Legendary investors are sounding the alarm that the AI rally has gone too far, too fast, while money is literally fleeing the crypto markets. This suggests that the high-risk, high-reward trades that have dominated the market are exhausting themselves. When the riskiest corners of the market start to crack, smart money usually rotates into boring, safe-haven sectors like utilities. Buying these overlooked sectors provides safety and upside if the tech sector continues to fall.
Strategy approach
Build a sector rotation strategy on the Utilities Select Sector SPDR Fund (XLU) or similar defensive ETFs on the daily timeframe. Enter a long position when the 20-day EMA crosses above the 50-day EMA while the broader Nasdaq 100 index (QQQ) closes below its 10-day EMA. Hold for 20 trading days with a trailing stop of 3%.