There’s a weird smell in this market right now.

It’s not exactly the stink of a meltdown, but not really the fresh scent of a new bull run either. 

And for most traders, the worst kind of smell is the one you can’t quite place.

For a while, things were pretty straightforward: Tech was leading, and large-cap momentum names like Nvidia, Apple, and Microsoft were doing the heavy lifting. 

You could ride that wave with your eyes closed and make money just by being long the right ETFs or selling puts on the dips. 

But lately the tone has changed in a frustrating, muddy kind of way. 

The headlines might say the market’s up, but under the surface, there’s a tug-of-war going on. 

The clean leadership from growth and tech is getting splintered. 

Now we’re seeing money sneak its way into defensive corners like healthcare, energy, and even some high-quality dividend names. 

On the surface, it looks like a healthy rotation. 

But if you zoom in, it’s not that clean. 

Here’s how you can find a way through the fog. 

Energy Grinding Upward

Take energy stocks, for example. These names were left for dead a few months ago. 

Crude prices weren’t exactly lighting the world on fire, and the AI hype machine had eclipsed everything else. 

But now a couple oil names are quietly waking up. 

The Energy Select Sector SPDR Fund’s 52-week range is $74.49 per share to $95.93, and we’re seeing some institutional call buying in names like SLB N.V. (NYSE: SLB), which just introduced an AI assistant on its platforms. 

That growth isn’t explosive, but it is steady. 

And that tells me big money is hedging against something.

Healthcare’s Waking Up

Then there’s healthcare. 

That sector has been boring for most of the year — and I mean boring. 

But boring can be good when the broader tape starts chopping sideways. 

Tickers like UnitedHealth Group Incorporated (NYSE: UNH) and Eli Lilly and Company (NYSE: LLY) aren’t going to 5x your money in six months, but they hold up when risk-off behavior creeps in. 

What’s even more important for traders like us is these names can get mispriced in the options market during these weird transition phases. 

When everyone’s still focused on the sexy names, you can sell premium or get long options in these forgotten sectors at decent prices.

Uneven AI Landscape

Now, let’s talk about small-cap AI, which is a mess right now.

You’ve got one or two names popping 30% in a week on some random partnership announcement, while others get obliterated for missing revenue by 1%. 

The volatility is jacked. 

These aren’t your clean, institutional tech leaders with a steady hand on the wheel. 

This is the speculative stuff, and it’s behaving exactly how you’d expect in a market that’s trying to find new leadership but isn’t quite there yet.

And guess what? That’s fine by me. 

I don’t need a neat rotation to make money. I just need movement and mispricing. 

That’s exactly what this environment gives options traders.

When the market’s confused, it creates opportunity because pricing models still have to make assumptions, and those assumptions are based on past behavior. 

But when leadership breaks down — when tech cools off, value starts climbing, and defensive stocks sneak higher — those assumptions go out the window. 

That’s when options get cheap in the wrong places and expensive in the right ones and selling premium works better. 

Buying calls on low-float stocks with real news behind them can give you a triple-digit wins.

So no, this isn’t a clean rotation from one sector to another. It’s a market that’s re-pricing risk in real time. 

That’s messier and more volatile, but far more profitable if you know what to look for.

Let the index investors whine about the lack of clarity. We don’t need clarity — we need movement and an edge.

And right now there’s plenty of both.

Stay Street Smart,
Jeff Zananiri