So the market's been on a tear. You've probably noticed. The NASDAQ just strung together 13 straight winning days, and the S&P 500 is knocking on the door of new highs. It feels like everything is going up. But according to BTIG's Jonathan Krinsky, that's exactly when you should start tapping the brakes—or at least, check your rearview mirror.
Krinsky isn't calling for a crash. In fact, he thinks the rally is the real deal and that the S&P 500 can push sustainably beyond the 7,000 level. The medium-term outlook, he says, is still constructive. The problem isn't the direction; it's the price tag. After a near-vertical 15–16% surge, he warns that jumping in now might mean buying at the worst possible moment within a longer-term uptrend.
"The rally looks real, but the timing to chase it isn't," Krinsky said, essentially flashing a yellow light on the market's blistering run. He told CNBC last Saturday that while the signals point to a durable move, investors need to weigh their timeframe and entry point. A better opportunity to get in, he argues, will likely emerge after some of this froth settles.
Software's Still Got Game, But Semis Are Smoking
Not every corner of the market is equally expensive, though. Krinsky sees a clear divergence. On one side, you have software—a sector he identifies as still having upside and continued momentum. Think of the usual suspects: Microsoft Corp. (MSFT), Oracle Corp. (ORCL), Palantir Technologies Inc. (PLTR), Google parent Alphabet Inc. (GOOGL), and Meta Platforms Inc. (META).
On the other side, you have semiconductors, and here Krinsky is waving a big red flag. The group, he notes, is sitting a staggering 17% above its 50-day moving average. That's an extreme level he says has been rarely seen over the past couple of decades. We're talking about the high-flyers like NVIDIA Corp. (NVDA), Broadcom Inc. (AVGO), and Advanced Micro Devices, Inc. (AMD).
His take? Parts of the market are showing "too much cheer" and could be due for a near-term pullback, even if the broader bull trend remains intact. It's the classic story of a rally that's gotten ahead of itself in specific, momentum-driven areas.
Where to Hide (and Maybe Even Thrive) Right Now
If most of the market is "super extended," as Krinsky puts it, where does that leave an investor looking for a sensible place to put money today? He points to the sectors that have been left behind in the mad dash for growth: the defensives.
Consumer staples and healthcare have lagged this rally, and that underperformance might now make them a better near-term setup. They offer a bit of a hedge. Think of the giants in staples: Walmart Inc. (WMT), Costco Wholesale Corp. (COST), and Procter & Gamble Co. (PG). In healthcare, the blue-chips like UnitedHealth Group Inc. (UNH), Johnson & Johnson (JNJ), and Pfizer Inc. (PFE).
But perhaps his most interesting call is on bonds. Krinsky sees them as attractive because they haven't participated in the rebound, even as crude prices ease and equities soar. He believes a potential upside move in bonds could actually help support these defensive stock sectors in the near term. It's a way to build a position that isn't relying on the most stretched parts of the market to keep stretching.
The bottom line from Krinsky is one of patience and selectivity. The rally isn't over, but the easy money might be. For investors, the game now is about waiting for a better pitch or looking for value in the corners of the market that haven't been bid up to dizzying heights. Sometimes, the best trade is the one you don't make—at least, not yet.
