Tactical Market Trends: Defensive Equity Rotation Deepens into Close
27 of 59 equity ETFs hold above their 20-day average, down 8.5pp.
Defensive equity leadership defines the October 23 close across our ETF universe. Twenty-seven of 59 ETFs (46%, -8.5pp on the day) trade above their 20-day moving averages (20D MA), and 38 of 58 (66%, +1.7pp) outperform the S&P 500 SPY. The 20pp price-relative gap separates low-volatility, quality, and dividend-led US equity from emerging markets, Asia, and growth-oriented US equity.
Fixed income trades above price averages, with 16 of 17 ETFs above their 20D MA. Leadership vs the Aggregate Bonds AGG is limited to long duration, inflation-linked bonds, and munis. Long duration shows 1 of 1 above its price average and 1 of 1 ahead of AGG. Short duration shows 1 of 2 above price averages and 0 of 2 ahead of benchmark.
Specialty participation is selective, with 4 of 15 ETFs above their 20D MA. Leadership vs the S&P 500 SPY is limited to low volatility, biotech, and alternatives. Managed Futures DBMF and Long/Short Equity FTLS crossed above their ratio MAs vs benchmark. Commodities leadership centers on broad commodities and oil. Silver lags.
Key Takeaways
Germany EWG, down 3.12% over the trailing 20-day window, crossed below its 20D MA. EWG also trades below its price average and above its ratio MA vs the S&P 500 SPY.
Cross-timescale equity alignment stands at 51% and concentrates in low volatility, value and quality, and dividend-led US equity. Emerging markets, Asia, and growth-led US equity anchor the laggard side across daily, weekly, and monthly readings.
Managed Futures DBMF and Long/Short Equity FTLS both crossed above their ratio MAs vs the S&P 500 SPY from below their price averages. High Yield Bonds JNK crossed above its 20D MA. Investment Grade Credit LQD crossed below its ratio MA vs the Aggregate Bonds AGG.
Featured ETF: iShares MSCI Germany ETF EWG
Technical Signals
Equity: Price vs 20-day MA
| Signal | Ticker | Name | 20D perf |
|---|---|---|---|
| Cross-down | VB | Vanguard Small-Cap Index ETF | -0.56% |
| Cross-down | SLYG | SPDR S&P 600 Small Cap Growth ETF | -0.95% |
| Cross-down | VGK | Vanguard FTSE Europe Index ETF | -2.69% |
| Cross-down | INDA | iShares MSCI India ETF | -2.93% |
| Cross-down | EWG | iShares MSCI Germany ETF | -3.12% |
Equity vs SPY: Price Ratio vs 20-day MA
| Signal | Ticker | Name | 20D rel perf |
|---|---|---|---|
| Cross-up | IVLU | iShares Edge MSCI Intl Value Factor ETF | -2.60% |
Fixed Income: Price vs 20-day MA
| Signal | Ticker | Name | 20D perf |
|---|---|---|---|
| Cross-up | JNK | SPDR Bloomberg High Yield Bond ETF | -0.59% |
Fixed Income vs AGG: Price Ratio vs 20-day MA
| Signal | Ticker | Name | 20D rel perf |
|---|---|---|---|
| Cross-down | LQD | iShares iBoxx $ Investment Grade Corporate Bond ETF | -0.18% |
Specialty vs SPY: Price Ratio vs 20-day MA
| Signal | Ticker | Name | 20D rel perf |
|---|---|---|---|
| Cross-up | FTLS | First Trust Long/Short Equity ETF | +1.05% |
| Cross-up | DBMF | iMGP DBi Managed Futures Strategy ETF | +2.71% |
Related
- SPY candlestick signals: forward returns by pattern and sentiment
- Fear and greed: today's market sentiment reading
- ETF trend metrics explained
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.
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