Swami Weekly Wrap: October 5th, 2026 [Inflation is asymmetrically distributed]

Hi Swami Subs,

The market is splitting into two very different tapes....

Growth, technology, momentum, the dollar, oil, and crypto continue to hold up, while small caps, value, low-volatility equities, gold, and other inflation-sensitive assets are losing ground. That divergence has helped Swami All-Equity stay ahead, but it is also becoming increasingly stretched.

THE MACHINE continues to favor growth heading into next week, with Technology, Mega-Cap Growth, Semiconductors, Cloud Computing, and several of the market’s highest-beta individual names rising to the top of the signal stack. But there is an important distinction between following signal strength and chasing recent performance. After a month in which high beta has dramatically outpaced low volatility, mean reversion risk is rising.

The macro board is also cleaning itself up. INFL and IWN have both broken down and were stopped out as wrong, leaving CORN as the only open macro position heading into next week.