Daily Tactical: Fixed Income Turns Credit-Led

Bond participation broadened fast while equity leadership stayed narrow

At the close, fixed income delivered the clearest breadth inflection, with bond participation swinging decisively toward credit across our ETF universe. In fixed income, 14 of 17 ETFs (82%, +47.1pp on the day) held above their 20-day moving average and 12 of 16 (75%, +18.8pp) outperformed AGG, with High Yield HYG helping lead a move across credit, mortgages, munis, EM debt and short duration. We treat that as genuine bond participation, even as Long Treasuries TLT only recovered in price and Treasuries still lagged on a relative basis, keeping the duration split tilted away from rate-sensitive exposure.

Equity remains benchmark-led rather than broad. 48 of 59 ETFs (81%, unchanged on the day) held above their 20-day moving average, but only 11 of 58 (19%, +3.5pp) were beating SPY, leaving a +62pp gap; leadership is concentrated in US growth and technology plus parts of Asia-Pacific and emerging markets, while low-volatility, dividend and much of developed ex-US sit above their moving averages without keeping up.

That same quality problem runs through specialty, where 12 of 15 ETFs (80%, unchanged on the day) were above their 20-day moving average but only 4 of 15 (27%, unchanged) outperformed, leaving a +53pp gap as semiconductors, momentum and clean energy led while gold-linked, real estate and option-income exposures failed to confirm. In commodities, copper improved versus SPY while oil slipped back below its moving average, so participation there remains selective rather than uniform.

20-Day Tactical Breadth

Key Takeaways

• The equity relative turn is narrow and still tentative: Copper Miners COPX and Japan EWJ crossed above their ratio moving averages versus SPY despite negative 20-day returns, signaling improving relative direction from a weak base, while Asia-Pacific equity and US technology remain the more established relative leaders across timescales.

• Bonds offer cleaner confirmation. Investment Grade Credit LQD, Corporate Credit VCIT and Mortgage-Backed MBB all crossed above their ratio moving averages versus AGG as they reclaimed their 20-day moving averages, reinforcing leadership in spread product and securitized credit, whereas Long Treasuries TLT sits above its 20-day moving average without comparable relative strength.

• Defensive specialty and energy do not confirm. Gold Miners GDX crossed above its 20-day moving average after a -4.83% 20-day return, Min Volatility USMV crossed below its 20-day moving average, and Oil USO with a +7.03% period return crossed below its 20-day moving average. Copper CPER also crossed above its ratio moving average versus SPY with a negative 20-day return, which we treat as early stabilization rather than established leadership.

FEATURED ETF — United States Oil Fund LP USO

Other Technical Signal Events

EQUITY

↗ Price breakouts (cross-up 20D MA)

• IDV - iShares International Select Dividend ETF · 20D perf: +1.39%

↘ Price breakdowns (cross-down 20D MA)

• SDY - SPDR® S&P Dividend ETF · 20D perf: +0.48%

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

• COPX - Global X Copper Miners ETF · 20D relative perf: -5.18%

• EWJ - iShares MSCI Japan ETF · -3.61%

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

None on the close

FIXED INCOME

↗ Price breakouts (cross-up 20D MA)

• TLT - iShares 20+ Year Treasury Bond ETF · 20D perf: -0.11%

• VCSH - Vanguard Short-Term Corporate Bond · +0.28%

• MBB - iShares MBS ETF · +0.29%

• VCIT - Vanguard Intermediate-Term Corporate Bond · +0.32%

• LQD - iShares iBoxx $ Investment Grade Corporate Bond ETF · +0.39%

• HYG - iShares iBoxx $ High Yield Corporate Bond ETF · +0.75%

• JNK - SPDR® Bloomberg High Yield Bond ETF · +0.84%

↘ Price breakdowns (cross-down 20D MA)

None on the close

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

• MBB - iShares MBS ETF · 20D relative perf: unch.

• VCIT - Vanguard Intermediate-Term Corporate Bond · +0.13%

• LQD - iShares iBoxx $ Investment Grade Corporate Bond ETF · +0.20%

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

None on the close

SPECIALTY

↗ Price breakouts (cross-up 20D MA)

• GDX - VanEck Gold Miners ETF · 20D perf: -4.83%

↘ Price breakdowns (cross-down 20D MA)

• USMV - iShares MSCI USA Min Vol Factor ETF · 20D perf: +1.38%

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

None on the close

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

None on the close

COMMODITIES

↗ Price breakouts (cross-up 20D MA)

None on the close

↘ Price breakdowns (cross-down 20D MA)

• USO - United States Oil Fund LP · 20D perf: +7.03%

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

• CPER - United States Copper LP · 20D relative perf: -1.72%

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

None 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.