Monday’s Gong Forgotten. Tuesday Delivered
Ahoy there, Trader! ⚓️
It’s Phil…
Well, if Monday was my bad start to the month – Tuesday more than made up for it.
7 trades. 7 wins. A full bag of Poppers and swingers. Including a $90 Morning Pulse at 90% ROC and a RUT Tag ‘n Turn swing at 95.7%.
And here’s the best part: I was at a friend’s 80th birthday party for the afternoon. UK time, remember? The system did its thing in the morning, I collected, while celebrating a milestone with good people.
That’s the lifestyle this system creates. Monday’s gong? Forgotten. One bad trade or one bad day doesn’t make the week. Similarly, one good day can turn the week – and sometimes the month – around.
But let’s not get too far over our skis. Today is a new day. The overall bear thesis is still in play for the swings. Time decay is doing its thing while the days yoyo around. And once again, I’m awaiting the opening bell to see if there are more morning Poppers.
Meanwhile, the rest of the market? Absolute carnage. Anthropic launched a legal AI tool and $285 billion in software stocks evaporated. PayPal crashed 20%. Bitcoin hit its lowest since the election. They’re calling it the “SaaSpocalypse.”
We just traded the range.
Scroll down for Tuesday’s full trade recap and why the software world is having an existential crisis…
Market Briefing:
Multi-Market Status
SPX: Bearish at Upper Range. Current 6,917.82. Target Range Lows around 6,840. BB %b at 0.32 showing price in lower half of bands. MACD-V bearish. The bear swing continues grinding lower. Time decay working whilst price yoyos.
RUT: Bearish at Upper Range. Current 2,648.49. Target Range Lows around 2,520. The head and shoulders pattern remains textbook – left shoulder, head at NATH (2,735), right shoulder complete. Price back around the neckline area. Pattern intact.
ES Futures: 6,948.75 – hovering mid-range. 5% correction levels still marked but never tested.
NQ Futures: 25,442.50 – tech under pressure from SaaSpocalypse and AMD’s weak outlook.
YM Futures: 49,474 – old economy holding up. Transports hit ATH Monday.
RTY Futures: 2,665.1 – small caps bouncing but H&S structure unchanged.
Gold: $5,074.2 – continuing its recovery. Now back above $5,000 after the crash to $4,617. Deutsche Bank was right: positioning unwind, not fundamental.
VIX: 17.90 – slightly elevated. Enough to fatten premiums.
Bitcoin: $76,077 – touched $72,884 Tuesday. Lowest since November 2024 election. Bitwise CIO declared “full-bore 2022-style winter.” Fear & Greed at 14. Half a trillion erased in a week.
Tuesday’s Trades: The Redemption Round
After Monday’s gong, Tuesday delivered the complete opposite. 7 trades. 7 wins. Here’s every one:
SPX Premium Popper #1: $25 index move / 61.5% ROC ✅ Bear break off ORB20. Price broke lower, collected premium. Clean setup.
SPX Premium Popper #2: $20 index move / 58.3% ROC ✅ Continuation bear break. ORB20 doing exactly what it does.
SPX Premium Popper #3: $24 index move / 64.3% ROC ✅ Third BO – the system kept giving and the setups kept working.
SPX Morning Pulse: $90 index move / 90.0% ROC ✅ Bearish at Upper Range. The big one. Entered at the range highs and rode the move down. 90% return on capital. This is what the Morning Pulse does when the range setup aligns.
RUT Tag ‘n Turn: $30 index move / 95.7% ROC ✅ Bearish at Upper Range. PFZ flip confirmed the direction. Nearly full return on capital. The TnT swing doing what it does best in range-bound conditions.
RUT Premium Popper: $10 index move / 65.5% ROC ✅ Bear break off the VWAP area. Smaller move but solid return.
RUT Premium Popper (Range Reversal): $14 index move / 64.5% ROC ✅ Range reversal pattern. Price hit the upper boundary and reversed. Classic.
Tuesday’s Totals:
- Trades: 7
- Wins: 7
- Win Rate: 100%
- Total Index Points: $213
- Average ROC: 71.4%
- Best Trade: RUT TnT 95.7% ROC
February Running Total:
- Monday: 0/1 (gong)
- Tuesday: 7/7 (perfect)
- Week: 7/8 (87.5%)
One bad day doesn’t make the week. One good day can turn it around. Process over emotion. Every single time.
The SaaSpocalypse
While we were collecting Premium Poppers, the software world was having an existential crisis.
What happened: Anthropic launched a legal AI tool that can do in seconds what armies of legal analysts do in hours. The market’s reaction was immediate and brutal.
The Carnage:
- Goldman Sachs software basket: -6% (worst day since April)
- RELX: -13%
- Thomson Reuters: -16%
- LegalZoom: -20%
- CS Disco: -12%
- ServiceNow: -7% (now -28% YTD)
- Salesforce: -7% (-26% YTD)
- Intuit: -11% (-34% YTD)
- iShares Software ETF: down 20% YTD
Total damage: $285 billion in market cap erased.
Jefferies called it “get me out” selling. JPMorgan said the sector isn’t just “guilty until proven innocent” but “sentenced before trial.”
Even private equity got hit: Blue Owl, TPG, Ares, KKR all down double digits. The market is asking: if AI replaces the workers, who needs the software the workers use?
The winners: Old economy. Procter & Gamble. FedEx. Union Pacific. Transports hit all-time highs on Monday. Walmart crossed $1 trillion market cap. The stuff that can’t be replaced by a chatbot.
The Crypto Winter Returns
Bitcoin’s slow-motion breakdown accelerated Tuesday:
- Touched $72,884 – lowest since November 2024 election
- Down 39% from peak
- Bitwise CIO officially declared “full-bore 2022-style winter”
- Fear & Greed Index: 14 (Extreme Fear)
- Half a trillion dollars erased in one week
For context: this price level means Bitcoin has given back every single cent it gained since Trump’s election victory. The entire “crypto president” trade has been unwound.
Gold meanwhile continues recovering – back above $5,000 at $5,074. The “real” safe haven slowly reasserting itself whilst the “digital” one keeps sliding.
New Day, Same Plan
Let’s not get carried away by Tuesday’s perfect day. The plan remains:
Bear swings: Still active on both SPX and RUT. Time decay is doing its thing. The days yoyo up and down but the theta clock ticks in our favour. No harm, no foul.
Morning Poppers: Awaiting the opening bell again. Yesterday the bears showed up at the ORB20. Today might be different. The system will tell us – we don’t predict.
The range: SPX still between range highs (~7,000) and range lows (~6,840). RUT H&S still intact. The structure hasn’t changed just because one day was perfect and one day was a gong.
Tonight: Alphabet reports after close. $2.64 EPS expected, $111.48B revenue. The question isn’t whether Google beats – it’s whether anything can stop the software bleeding.
The Week So Far
| Day | Event | Forecast | Actual |
|---|---|---|---|
| Mon 2 Feb | ISM Manufacturing PMI | 48.5 | 52.6 ✅ |
| Tue 3 Feb | JOLTS Job Openings | 7.21M | TBC |
ISM Manufacturing at 52.6 was a surprise – first expansion in 26 months. That’s positive for the real economy even whilst software stocks implode.
Still to come:
- Wed 4 Feb: ADP Employment (48K exp), ISM Services (53.6 exp)
- Thu 5 Feb: Unemployment Claims (213K exp)
- Fri 6 Feb: NFP (67K exp) – if government reopens, currently postponed
Expert Insights
The SaaSpocalypse Thesis: Real or Overblown?
The market’s reaction to Anthropic’s legal AI tool raises a fundamental question: is software dead, or is this an overreaction?
The bear case: AI agents can now perform tasks that previously required expensive software AND the humans to operate that software. If an AI can draft legal documents, process invoices, and analyse data, why do companies need Salesforce, ServiceNow, or Intuit? The entire SaaS business model – charging per seat for software humans use – faces an existential threat when AI removes the human from the equation.
The bull case: Every major software company is integrating AI themselves. Salesforce has Einstein. ServiceNow has Now Assist. These platforms have decades of enterprise data and integrations that can’t be replicated overnight. The -6% basket decline looks like panic selling, not fundamental reassessment.
The reality: Probably somewhere in between. Some software will be replaced entirely. Some will be enhanced. And some – like Palantir at Rule of 40 of 127 – will be the ones doing the replacing.
For traders, the SaaSpocalypse creates volatility. Volatility creates premium. Premium is what we sell. The existential questions are fascinating but irrelevant to the opening bell.
In Other News…
Anthropic Launches AI Lawyer, Destroys $285B in Legal and Software Stocks
Entire industries discover their business model was “things AI can do now.”
Wall Street witnessed the SaaSpocalypse Tuesday as Anthropic’s legal AI tool triggered an existential reckoning across software, fintech, and asset management. Thomson Reuters lost 16%, LegalZoom shed 20%, and Goldman’s software basket posted its worst day since April. Meanwhile Procter & Gamble rallied because soap remains stubbornly resistant to disruption.
⚖️ The Legal Extinction Event
Anthropic announced an AI that does legal work. RELX crashed 13%, Thomson Reuters 16%, LegalZoom 20%, CS Disco 12%. Decades of billing by the hour suddenly looks vulnerable when a machine does it in seconds for pennies. ServiceNow now -28% YTD, Intuit -34% YTD. The question isn’t which software company gets disrupted—it’s which one doesn’t.
PayPal’s CEO Heads for Exit
PayPal crashed 20% on a Q4 miss and CEO departure, because nothing screams confidence like leadership abandoning ship during a sector massacre. Novo Nordisk dropped 18% on declining 2026 sales. AMD fell 7% on weak Q1 outlook. Tuesday was generous with its carnage.
The Untouchables
Procter & Gamble, FedEx, Union Pacific—all green. Transports hit all-time highs. ISM Manufacturing crossed 52.6, first expansion in 26 months. AI can draft contracts and write code, but it still can’t deliver a parcel or manufacture toothpaste. Physical economy’s moat has never looked wider.
☕ Hazel’s Take
Palantir gained 6.8% selling AI whilst software stocks lost $285B fearing AI. The irony writes itself. Alphabet reports tonight—presumably to explain whether it’s the disruptor or the disrupted.
—Hazel, FinNuts
Rumour Has It…
The Financial Nuts Newsroom is split down the middle…
Percy walks in with a party hat still on his head. “I heard you lot had a good day yesterday. While I was trying to understand what a SaaSpocalypse is.”
Hazel pulls up the trade log. “Seven from seven. Three SPX Poppers, a Morning Pulse, a TnT, two RUT Poppers. And Phil was at a birthday party.” She shakes her head. “This system doesn’t need anyone to babysit it.”
Mac raises his glass. “Monday: gong. Tuesday: seven wins. That’s trading in a nutshell. The system doesn’t remember yesterday. Neither should we.”
Kash is studying the ORB20 charts. “Three bear breaks on SPX. All worked. The Morning Pulse at ninety percent though?” He whistles. “That’s the one that pays for the month.”
Wallie hasn’t changed his board. “H&S. Bear swing. Range lows. Same targets. Same plan.” He looks at the SaaSpocalypse headlines scrolling across the bottom of the screen. “Software’s having a bad day. Our system isn’t software they’re worried about.”
Percy removes his party hat. “So we just… keep going?”
Everyone nods. That’s exactly what they do.
This is entirely made-up satire. Probably!
Breaking scoops courtesy of the Financial Nuts Newswire-because who needs sanity?
Fun Fact:
The $285B SaaSpocalypse in Context
Tuesday’s $285 billion software rout triggered by Anthropic’s legal AI tool wasn’t just the sector’s worst day since April – it may mark the beginning of a structural repricing of the entire SaaS business model.
Consider how quickly the thesis changed: in 2023, AI was going to boost software companies by making their products smarter. In 2024, software companies were the “picks and shovels” of the AI revolution. By early 2025, the question shifted to “does AI replace some software?” By February 2026, the market is pricing in “AI might replace most software workers AND the software they use.”
The iShares Software ETF is now down 20% year-to-date. ServiceNow, the poster child of enterprise SaaS, has lost 28% this year. Intuit, which helps small businesses with accounting, has shed 34%. The market is essentially saying: if AI can do accounting, legal, and customer service, who’s paying $150 per seat per month for software?
Meanwhile, the companies building the AI are thriving. Palantir’s Rule of 40 at 127. Super Micro’s revenue 24% above estimates. The money isn’t disappearing from tech – it’s moving from software that humans use to AI that replaces humans.
[Source: Goldman Sachs software basket data, iShares Software ETF performance, Q4 earnings reports]
Happy trading,
Phil
Less Brain, More Gain
…and may your trades be smoother than a cashmere codpiece
p.s. There are 3 ways I can help you…
- Option 1: The SPX Income System Book (Just $12)
A complete guide to the system.
Written to be clear, concise, and immediately actionable.
>> Get the Book Here
- Option 2: Full Course + Software Access – 50% off for Regular Readers – Save $998.50
Includes the video walkthroughs, tools for TradeStation & TradingView, and everything I use daily. Plus 7 additional strategies
>> Get DIY Training & Software
- Option 3: Join the Fast Forward Mentorship – 50% off for Regular Readers – Save $3,000
>> Join the Fast Forward Mentorship – trade live, twice a week, with me and the crew. PLUS Monthly on-demand 1-2-1’s
No fluff. Just profits, pulse bars, and patterns that actually work.
