Leadership Narrows as Credit Holds Up

At Thursday's close, we see price participation still outrunning relative confirmation across our ETF universe. In equity, 58 of 62 ETFs (94%, unchanged on the day) held above their 20-day moving average, but only 15 of 61 (25%, -1.6pp on the day) outperformed their benchmark, leaving a +69pp gap and a benchmark-led advance rather than broad leadership. The relative winners are concentrated in US growth, small-cap and infrastructure alongside Taiwan and South Korea, while EM, developed ex-US, dividend and low-volatility exposures are still above their 20-day averages but lagging the benchmark.

Fixed income is the clearest pocket of confirmation in our coverage: 16 of 17 ETFs (94%, -5.9pp on the day) stayed above their 20-day moving average while relative breadth rose to 10 of 16 (62%, +6.2pp), an improving +32pp gap led by credit, EM debt, munis, preferreds and short-duration inflation-linked names as Treasuries and long duration lag. Alternatives deteriorated instead: 12 of 13 ETFs (92%, -7.7pp) still held above their 20-day moving average, yet only 2 of 13 (15%, -7.7pp) beat SPY, leaving a +77pp gap as oil and bitcoin carry the relative side while gold, real estate and broad commodity exposures remain mostly price recoveries without leadership, which keeps confirmation narrow at the close.

20-Day Tactical Breadth

Key Takeaways

• Across timescales, equity leadership is narrower than the headline price breadth suggests. Taiwan equity EWT, South Korea equity EWY and the US growth cluster remain the cleanest relative leaders, and Small-Cap Core IJR plus Infrastructure PAVE both crossed above their relative 20-day averages versus SPY. At the same time, Utilities XLU crossed above its 20-day moving average on a 1.86% 20-day return, but utilities still sit in the cross-timescale relative laggard camp, while Emg. Markets EEM and Copper Miners COPX slipped below their relative 20-day averages despite still-positive 20-day relative returns.

• In fixed income, we are not seeing a blanket duration bid. Short Corporate VCSH and Short TIPS VTIP crossed above their relative 20-day averages versus AGG, fitting the broader cross-timescale leaders in EM debt, high-yield credit, munis, preferreds and investment grade credit. Long Treasuries TLT crossed below its 20-day moving average and Mortgage-Backed MBB fell below its relative 20-day average, so the leadership is coming from credit and short duration, not from rate-sensitive Treasury duration; we read that short-duration strength as stability rather than outright risk appetite.

• Alternatives are losing confirmation fastest beneath the surface. Oil USO crossed above its relative 20-day average versus SPY on a 10.15% 20-day return, while Gold GLD crossed below its 20-day moving average; Copper CPER also fell below its relative 20-day average despite a positive 20-day relative return, and Ethereum Trust ETHA did the same on a -1.19% 20-day return. We therefore see alternatives leadership as extremely narrow, with oil and bitcoin standing apart from gold, real estate and the broader commodity complex.

FEATURED ETF — United States Oil Fund LP USO vs SPY

Other Technical Signal Events

EQUITY

Absolute Price Signals

Above 20D moving average

• Utilities Select Sector XLU (20D perf: +1.86%)

Below 20D moving average

• VanEck Gold Miners ETF GDX (20D perf: +6.80%)

Relative Strength Signals (vs SPY)

Above 20D moving average

• iShares Core S&P Small-Cap ETF IJR (20D relative perf: +0.49%)

• Global X U.S. Infrastructure Development ETF PAVE (+1.77%)

Below 20D moving average

• Global X Copper Miners ETF COPX (20D relative perf: +1.07%)

• iShares MSCI Emerging Markets ETF EEM (+0.67%)

• Consumer Discretionary Select Sector XLY (-1.42%)

FIXED INCOME

Absolute Price Signals

Below 20D moving average

• iShares 20+ Year Treasury Bond ETF TLT (20D perf: unch.)

Relative Strength Signals (vs AGG)

Above 20D moving average

• Vanguard Short-Term Corporate Bond VCSH (20D relative perf: unch.)

• Vanguard Short-Term Inflation-Protected Securities VTIP (+0.28%)

Below 20D moving average

• iShares MBS ETF MBB (20D relative perf: unch.)

ALTERNATIVES

Absolute Price Signals

Below 20D moving average

• SPDR® Gold GLD (20D perf: +3.54%)

Relative Strength Signals (vs SPY)

Above 20D moving average

• United States Oil Fund LP USO (20D relative perf: +10.15%)

Below 20D moving average

• United States Copper LP CPER (20D relative perf: +1.41%)

• iShares Ethereum Trust ETF ETHA (-1.19%)

Romain Gandon

CEO, Quantlake

Disclaimer: This report is for informational and educational purposes only and does not constitute investment advice.