<![CDATA[Quantmatix US Sector Research Note - Significant Signal Cluster: Software Resilience & Strategic Rotation]]>

Quantmatix US Sector Research Note

Significant Signal Cluster: Software Resilience & Strategic Rotation

16 March 2026 | 11:30 AM GMT 

Prepared by: Liam Boggan, Quantmatix CEO and Founder, Head of Research

Executive Summary: Index & Sector Dynamics

Quantmatix data for the March 13th close confirms a major divergence in Institutional Momentum. While the broad global market remains stagnant, the Software & Services sector is signaling a structural shift in capital allocation.

The US Software Sector (representing the 117 stocks of the XSW ETF) shows 50 stocks currently in an Advancing direction. Most significantly, we have identified a significant cluster of 23 positive signals within this group. This cluster represents a coordinated move by institutional capital into software infrastructure and cybersecurity as a defensive response to the ongoing Iran war. In stark contrast, the China Software sub-sector is exhibiting extreme weakness, with a Significant Negative Cluster of 5 sell signals.

The Q Score, which is a proprietary measure of Velocity (Direction and Momentum), confirms that institutional conviction is centering on US-based digital defense while broad indices fail to find a floor.

style="margin: 0 0 25px 0; color: #DEDC04; font-size: 18px; font-weight: bold; text-transform: uppercase; letter-spacing: 0.5px;"> Market News Context: The Impact of Conflict

Energy Supply Shock

Brent Crude has stabilized above $104.37 following the effective closure of the Strait of Hormuz. This supply shock is forcing corporations to prioritize software that enables digital efficiency and operational resilience.

Cyber Warfare The conflict has entered a digital phase. Recent state-sponsored attacks on Western infrastructure have transformed cybersecurity into a mandatory national security priority.

Macro Headwinds With US GDP growth revised down to 0.7%, professional investors are moving away from physical cyclicals and into "asset-light" software models to protect margins.

S&P 500 & ACWI Index Analysis iShares MSCI ACWI ETF: Q Score: 0.0 | Direction: Declining. This reflects a global vacuum in momentum as institutional conviction remains sidelined.

SPDR S&P 500 ETF Trust (SPY): Q Score: -2.4 | Direction: Declining. The benchmark reflects general market fatigue as investors struggle with the inflationary impact of the energy shock.

Institutional Momentum: Primary trend analysis shows that while broad benchmarks are declining, velocity is specifically concentrating in infrastructure and security sub-sectors.

style="margin: 0 0 10px 0; color: #DEDC04; font-size: 18px; font-weight: bold; text-transform: uppercase; letter-spacing: 0.5px;"> Magnificent Seven (MAGS) Contextual Analysis

Institutional momentum across the MAGS complex is showing clear signs of exhaustion, with capital rotating into more specialized software defense plays.

style="padding: 12px; text-align: center; font-weight: bold; color: #ffffff; border-bottom: 2px solid #404040;"> Q Score Direction Last Reversal style="padding: 12px; border-bottom: 1px solid #333333; text-align: center; color: #d0d0d0;"> -0.4
Stock
APPLE INC (XNGS)
Advancing 06 Mar '26 (Positive) ALPHABET INC-A (XNGS) 0.6 Declining 20 Feb '26 (Negative) AMAZON.COM INC (XNGS) -5.3 27 Feb '26 (Negative) META PLATFORMS-A (XNGS) -3.1 13 Feb '26 (Negative) NVIDIA CORP (XNGS) -2.4 TESLA INC (XNGS) -6.7 23 Jan '26 (Negative) MICROSOFT CORP (XNGS) -9.0 Declining 15 Aug '25 (Negative)

Note: A Pending Signal in Microsoft switched off last week and did not confirm.

style="margin: 0 0 30px 0; color: #DEDC04; font-size: 18px; font-weight: bold; text-transform: uppercase; letter-spacing: 0.5px;"> Portfolio Positioning – Actionable Framework style="padding: 15px 12px; text-align: left; font-weight: bold; color: #ffffff; border-bottom: 2px solid #404040;"> Action Suggestion Targeted Sectors Rationale style="padding: 15px 12px; border-bottom: 1px solid #333333; font-weight: bold; color: #ffffff;"> Bullish Inflection Surge style="padding: 15px 12px; border-bottom: 1px solid #333333; color: #d0d0d0;"> US Software (Cyber & Infra) Significant Cluster: 23 Positive Signals. 50 stocks are Advancing. Money is centering on Zscaler and Crowdstrike. Advancing Positive Enterprise Efficiency Strengthening Scores: Names like Oracle (-7.4) and Intuit (-7.9) are leading the rotation out of big tech laggards. style="padding: 15px 12px; border-bottom: 1px solid #333333; font-weight: bold; color: #bbbbbb;"> Neutral / Negative Bias Global Tech (Ex-US) Regional Risk: EU and Asian tech scores are weakening as energy costs impact domestic economies. style="padding: 15px 12px; border-bottom: 1px solid #333333; font-weight: bold; color: #d0d0d0;"> Beware / Exhaustion China Software Significant Negative Cluster: 5 negative signals in major names. Institutional capital is exiting on sanction fears. Most Negative Consumer Discretionary Stalled Velocity: High fuel prices and war anxiety are draining consumer spending power. Detailed Expansion: Key Actionable Clusters

Theme: Cybersecurity & Infrastructure (The Positive Cluster)

The 100% participation of the "Advancing" subset in US Software marks this as the most significant cluster in the database.

Signal Priority 3: Deep Positive Delta Reversals (Score -4 to -10)
High-conviction signals where institutional momentum is inflecting positively from a deep base.

PAGERDUTY INC (XNYS): Score: -8.9 | Advancing | Last Reversal Date: 13 March '26 (Positive).

APPFOLIO INC - A (XNMS): Score: -8.6 | Advancing | Last Reversal Date: 13 March '26 (Positive).

ZSCALER INC (XNGS): Score: -8.4 | Advancing | Last Reversal Date: 13 March '26 (Positive).

C3.AI INC-A (XNYS): Score: -8.4 | Advancing | Last Reversal Date: 13 March '26 (Positive).

APPLOVIN CO-CL A (XNGS): Score: -8.4 | Advancing | Last Reversal Date: 13 March '26 (Positive).

DOMO INC- CL B (XNMS): Score: -8.1 | Advancing | Last Reversal Date: 13 March '26 (Positive).

INTUIT INC (XNGS): Score: -7.9 | Advancing | Last Reversal Date: 13 March '26 (Positive).

ORACLE CORP (XNYS): Score: -7.4 | Advancing | Last Reversal Date: 13 March '26 (Positive).

AUTODESK INC (XNGS): Score: -6.4 | Advancing | Last Reversal Date: 13 March '26 (Positive).

CROWDSTRIKE HO-A (XNGS): Score: -4.0 | Advancing | Last Reversal Date: 13 March '26 (Positive).

Theme: China Software "Risk" Exit (The Negative Cluster) Institutional capital is exiting Chinese software names as geopolitical risks escalate.

SHANG BAOSIGHT-A: Score: 6.7 | Declining | Last Reversal Date: 13 March '26 (Negative).

360 SECURITY T-A: Score: 3.3 | Declining | Last Reversal Date: 13 March '26 (Negative).

IFLYTEK CO LTD-A: Score: 1.7 | Declining | Last Reversal Date: 13 March '26 (Negative).

GLODON CO LTD-A: Score: 1.3 | Declining | Last Reversal Date: 13 March '26 (Negative).

YONYOU NETWORK-A: Score: 0.1 | Declining | Last Reversal Date: 13 March '26 (Negative).

Highest Conviction Stocks: Analytical Context

Prioritized strictly by: 1. Top Quantmatix, 2. TEVO, 3. Deep Positive Delta Reversals.

SPYROSOFT SPÓLKA AKCYJNA [-5.7, Top Quantmatix Positive]

Score: -5.7 | Advancing | Last Signal Date: 13 March '26 (Positive). This structural signal marks a high-conviction floor for specialized software.

IREN LTD [-0.9, Top Quantmatix Positive]

Score: -0.9 | Advancing | Last Signal Date: 13 March '26 (Positive). Structural signal indicating a major institutional shift toward power-efficient infrastructure.

PAGERDUTY INC [-8.9, Deep Positive Delta Reversal]

Score: -8.9 | Advancing | Last Reversal Date: 13 March '26 (Positive). Carries the strongest velocity reading in the US cluster.

ZSCALER INC [-8.4, Deep Positive Delta Reversal]

Score: -8.4 | Advancing | Last Reversal Date: 13 March '26 (Positive). A core cybersecurity play with high score magnitude and strengthening momentum.

ORACLE CORP [-7.4, Deep Positive Delta Reversal]

Score: -7.4 | Advancing | Last Reversal Date: 13 March '26 (Positive). Confirms a rotation into high-quality, cash-flow-positive enterprise infrastructure.

CROWDSTRIKE HO-A [-4.0, Deep Positive Delta Reversal]

Score: -4.0 | Advancing | Last Reversal Date: 13 March '26 (Positive). Essential cyber-defense asset currently seeing fresh institutional interest.

Imperative The Significant Cluster of 23 positive signals in US Software, with 50 stocks in the sector now Advancing, provides a clear roadmap. Professional clients should rotate out of China Software and broad index laggards like Microsoft—whose failed reversal signal warns of further weakness. Capital should be concentrated in the Deep Positive Delta Reversal leaders, specifically Zscaler, PagerDuty, and Oracle.

Disclaimer: These insights are generated using AI and are provided for informational purposes only. They do not constitute financial advice or a recommendation to buy or sell any security. The content may be incomplete or contain errors and should not be relied upon for investment decisions. Always consult a qualified financial adviser before making financial choices.

Source: Quantmatix – Exclusively US and Global Data [16 March 2026]

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