📊 The Score Called Friday's Rally—And It's Not Backing Down
At 5:20 AM ET on Friday, the score crossed into Momentum territory at 5.35 (60% QQQ / 40% TQQQ). At that point, QQQ had just closed Thursday at $597.03 after a brutal 4-day selloff that wiped nearly $1 trillion from software stocks.
What happened next? QQQ ripped 2.1% to close at $609.65. SPY popped 1.9%. The score was positioned before the open.
Today, the score briefly dipped to 5.31 (Constructive) at 9:35 AM before recovering to 5.35 just twenty minutes later. QQQ added another 0.77% to close at $614.32. SPY edged up to $693.95.
One thing to watch: QQQ at $614.32 is sitting just below the 70-day EMA at $616.95. No override applies since the score is already bullish, but reclaiming that EMA would be a significant technical confirmation. We're $2.63 away.
Final Recommendation: 60% QQQ / 40% TQQQ
🤖 The SaaSpocalypse: A Trillion-Dollar Reckoning
This is the story that won't stop. Anthropic's Claude Cowork tool launched industry-specific plugins last week—sales, finance, legal, data marketing—and the market responded like someone pulled the fire alarm in a crowded theater.
The damage so far:
- S&P 500 Software & Services Index: Down ~20% YTD, eight consecutive losing sessions
- Thomson Reuters: -15.8% in a single day—its worst ever
- LegalZoom: -19.7%
- Nearly $1 trillion in market cap erased from software and services stocks
Friday's rebound and today's modest green close suggest the bleeding is slowing, but the debate is existential: are AI agents going to replace the SaaS stack, or is this the "internet will kill newspapers" panic all over again?
The honest answer? Probably somewhere in between. AI will eat the commodity software—the stuff that's basically filling out forms and moving data between systems. But complex, deeply embedded enterprise platforms aren't disappearing overnight. The market, as usual, is pricing in the extreme scenario first and asking questions later.
📉 Flying Blind: The Data Vacuum Week
Here's something that's not getting enough attention: the government shutdown (January 31 - February 3) delayed two of the most important data releases of the month.
- January Jobs Report: Was scheduled for Friday Feb 6. Now coming Wednesday Feb 11
- January CPI: Pushed to Friday Feb 13
The market is trading in a data vacuum. The last jobs data we have is December's anemic 50K print with 4.4% unemployment. Expectations for January are modestly better—70K jobs, unemployment holding—but nobody's confident given the noise from government layoffs and DOGE-related disruptions.
This is the second major shutdown disruption in months (the record 43-day shutdown hit late 2025). The data was collected—BLS confirmed that—it just couldn't be processed while the government was dark. Translation: Wednesday and Friday this week could be fireworks.
🇨🇳 China Tells Banks to Dump US Treasuries
Chinese regulators reportedly urged domestic financial institutions to curb their holdings of US Treasuries, citing "concentration risks and market volatility." China has been slowly reducing its Treasury exposure for years, but explicit regulatory guidance adds a new layer of intentionality.
Why it matters: if China accelerates its selloff, long-term US interest rates face sustained upward pressure. Higher rates mean more expensive borrowing for corporations and consumers—a headwind for equities, especially rate-sensitive sectors like housing and small caps.
With the Fed on hold at 3.5-3.75% and the next cut possibly pushed to April, the bond market has plenty of reasons to be nervous.
🎯 My Take: Rotation, Not Collapse
Here's the thing about the SaaS selloff: it's a rotation, not a market crash. While software gets demolished, look at what's actually happening:
- Nvidia popped 3.3% today. The company making the chips that power the AI eating software? Doing just fine.
- Microsoft added 1.5%. The company deploying the AI? Also fine.
- SPY and QQQ both closed green. The broad market is absorbing the SaaS shock.
The score sees this. At 5.35, it's saying the economic fundamentals—credit spreads, labor data, Fed positioning—support a bullish stance with leverage. Friday's 2% QQQ rally validated that call.
What concerns me is the EMA 70 proximity. QQQ at $614.32 needs to reclaim $616.95 to get above the trend line. That's just $2.63 away—one good morning could do it. But until it does, we're technically below-trend even while the score says Momentum.
Wednesday's jobs report and Friday's CPI will determine the direction for the rest of February. Strong data means the market rallies on economic resilience. Weak data ignites rate cut hopes but grows recession fears. The score is betting on resilience.
💡 Bottom Line: Data Week Will Make or Break It
The score is at 5.35 (Momentum: 60% QQQ / 40% TQQQ). It called Friday's rally from the pre-market, and today's follow-through confirms the signal isn't a fluke.
Key levels to watch:
- QQQ $616.95 (EMA 70): Get above this and the uptrend is confirmed
- QQQ $597 (last Thursday's low): Break below and the SaaS panic isn't done
- Wednesday Feb 11: Delayed January jobs report
- Friday Feb 13: Delayed January CPI
The SaaS selloff is dramatic but contained. AI is reshaping software, not killing the economy. The score agrees. Let's see if the data does too.