Daily Tactical Equity Rebound Lacks Leadership

At the close, we saw price participation in our ETF universe rebound hard in equity, led by Developed Markets VEA, Germany EWG, Japan EWJ, Intl Momentum IMTM, Intl Value IVLU and Industrials XLI crossing above their 20-day moving average. 43 of 59 equity ETFs (73%, +13.6pp on the day) held above their 20-day moving average, yet only 11 of 58 (19%, unchanged on the day) outperformed their benchmark, leaving a 54pp abs/rel gap. That tells us the recovery is spreading in price, but not in leadership: Taiwan, South Korea, US technology, energy and small-cap growth are still carrying the relative data, while much of the new developed ex-US participation remains a price recovery without confirmation.

We still read fixed income as defensive rotation rather than recovery. Only 3 of 17 fixed-income ETFs (18%, unchanged on the day) held above their 20-day moving average, while 11 of 16 (69%, -6.2pp on the day) outperformed AGG; Investment Grade Credit LQD crossed up on a relative basis, but 3-7yr Treasuries IEI and Int. Treasuries VGIT crossed down, keeping the leadership with credit, preferreds, inflation-linked and short-duration rather than rate-sensitive Treasuries.

In specialty, Infrastructure PAVE improved against SPY while Ethereum Trust ETHA slipped below its relative 20-day moving average, leaving semiconductors, clean energy, momentum and infrastructure as the only clean leadership cluster. We had no new commodity alerts this session, but oil and broad commodities still stand out as the aligned leaders across timescales, so confirmation outside equity remains selective.

20-Day Tactical Breadth

Key Takeaways

• Developed Markets VEA posted the strongest absolute 20-day momentum in this window at +6.0% and crossed above its 20-day moving average, but the broader developed ex-US block is still uneven. Germany EWG and Japan EWJ sit in cross-timescale absolute leadership, while developed Europe and broad developed ex-US benchmarks remain embedded in the relative laggard list.

• The cleaner equity leadership is narrower than the price rebound suggests. Cross-timescale relative leaders remain concentrated in emerging markets (EEM), Taiwan equity (EWT), South Korea equity (EWY) and US equity (IWM, IYW, QQQ), while Russell Growth IWF slipped below its SPY ratio average even with a positive 20-day relative return, pointing to fading leadership in broad large-cap growth as technology and smaller-cap growth keep the edge.

• Specialty participation also overstates underlying quality. Clean energy (ICLN), momentum (MTUM), infrastructure (PAVE) and semiconductors (SMH) are the relative leaders, but DBMF, ETHA, FTLS, JEPQ, REET and USMV are all above their 20-day moving average while still lagging SPY, which makes that advance benchmark-led rather than broadly confirmed.

FEATURED ETF — Vanguard FTSE Developed Markets VEA

Other Technical Signal Events

EQUITY

↗ Price breakouts (cross-up 20D MA)

• SDY - SPDR® S&P Dividend ETF · 20D perf: +1.96%

• IDV - iShares International Select Dividend ETF · +2.83%

• IVLU - iShares Edge MSCI Intl Value Factor ETF · +3.21%

• EWJ - iShares MSCI Japan ETF · +4.39%

• XLI - Industrial Select Sector · +4.95%

• IMTM - iShares MSCI Intl Momentum Factor ETF · +5.44%

• EWG - iShares MSCI Germany ETF · +5.68%

• VEA - Vanguard FTSE Developed Markets · +5.98%

↘ Price breakdowns (cross-down 20D MA)

None on the close

↗ Leadership gains (cross-up 20D MA vs SPY)

• SLYG - SPDR® S&P 600 Small Cap Growth ETF · 20D relative perf: +0.45%

↘ Leadership losses (cross-down 20D MA vs SPY)

• IWF - iShares Russell 1000 Growth ETF · 20D relative perf: +1.55%

FIXED INCOME

↗ Price breakouts (cross-up 20D MA)

None on the close

↘ Price breakdowns (cross-down 20D MA)

None on the close

↗ Leadership gains (cross-up 20D MA vs AGG)

• LQD - iShares iBoxx $ Investment Grade Corporate Bond ETF · 20D relative perf: unch.

↘ Leadership losses (cross-down 20D MA vs AGG)

• IEI - iShares 3-7 Year Treasury Bond ETF · 20D relative perf: -0.12%

• VGIT - Vanguard Intermediate-Term Treasury · -0.20%

SPECIALTY

↗ Price breakouts (cross-up 20D MA)

None on the close

↘ Price breakdowns (cross-down 20D MA)

None on the close

↗ Leadership gains (cross-up 20D MA vs SPY)

• PAVE - Global X U.S. Infrastructure Development ETF · 20D relative perf: +1.49%

↘ Leadership losses (cross-down 20D MA vs SPY)

• ETHA - iShares Ethereum Trust ETF · 20D relative perf: +2.22%

COMMODITIES

No event on the close

Romain Gandon
CEO, Quantlake

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Past performance is not indicative of future results.