Tactical Trends: Equity Leadership Narrows Into Growth and Asia

High participation now masks a 55pp equity breadth gap

At the close, the equity tape turned more benchmark-led. 49 of 59 ETFs (83%, -1.7pp) held above their 20-day moving average, yet only 16 of 58 ETFs (28%, -10.3pp) outperformed the S&P 500 SPY, leaving a +55pp gap. US growth, healthcare and Asia-linked equity held the relative lead, while developed ex-US, dividend, low-volatility and quality lost ground versus the benchmark. That configuration defines a concentrated equity regime rather than broad participation.

Fixed-income coverage strengthened across the board, with 17 of 17 ETFs (100%, +11.8pp) above their 20-day moving average and 9 of 16 ETFs (56%, +6.2pp) outperforming the Aggregate Bonds AGG. Credit, mortgages and EM debt led on the relative side, while government Treasuries, short-duration paper and inflation-linked exposure lagged the benchmark even as 3-7yr Treasuries IEI reclaimed its 20-day moving average, leaving a bond recovery led by spread product rather than a full Treasury-led defensive phase.

In specialty, 11 of 15 ETFs (73%, unchanged on the day) held above their 20-day moving average, yet only 3 of 15 ETFs (20%, unchanged on the day) outperformed the S&P 500 SPY as Semiconductors SMH, clean energy and momentum led and crypto-linked, gold-linked and income-oriented equity lagged the benchmark. The commodities bucket produced no fresh alerts at the close, and the broader cross-timescale backdrop still leaves copper as the only absolute leader while agriculture lags on the relative side, which keeps participation narrow outside the core bond rebound and benchmark-led equity advance.

20-Day Tactical Breadth

Key Takeaways

• Developed Markets VEA crossed below its ratio moving average versus S&P 500 SPY with a +0.74% 20-day relative return. That marks fading leadership rather than outright weakness. Germany EWG, Europe VGK, Small-Cap IJR and Quality Factor QUAL also lost their relative footing versus the benchmark. Healthcare XLV crossed above its ratio moving average on a -0.39% 20-day relative return. That leaves equity leadership rotating inside a narrowing benchmark-led regime.

• International High Yield IDV with a +2.50% period return crossed below its 20-day moving average. Covered Calls S&P JEPI and Consumer Staples XLP also fell back under their price averages. That extends the loss of traction in income and defensive equity exposure.

• Mortgage-Backed MBB crossed above its ratio moving average versus Aggregate Bonds AGG. 3-7yr Treasuries IEI and Short TIPS VTIP only reclaimed their price averages. We keep bond leadership concentrated in mortgages, credit and EM debt rather than in the Treasury complex.

FEATURED ETF — iShares International Select Dividend ETF IDV

Other Technical Signal Events

EQUITY

↗ Price breakouts (cross-up 20D MA)

• INDA - iShares MSCI India ETF · 20D perf: -0.69%

• XLC - Communication Services Select Sector · +1.20%

↘ Price breakdowns (cross-down 20D MA)

• IDV - iShares International Select Dividend ETF · 20D perf: +2.50%

• XLP - Consumer Staples Select Sector · +1.82%

• JEPI - JPMorgan Equity Premium Income ETF · -0.84%

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

• XLV - Health Care Select Sector · 20D relative perf: -0.39%

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

• VEA - Vanguard FTSE Developed Markets · 20D relative perf: +0.74%

• VT - Vanguard Total World Stock · unch.

• IVLU - iShares Edge MSCI Intl Value Factor ETF · -0.46%

• EWG - iShares MSCI Germany ETF · -0.80%

• QUAL - iShares MSCI USA Quality Factor ETF · -1.06%

• VGK - Vanguard FTSE Europe · -1.39%

• IJR - iShares Core S&P Small-Cap ETF · -2.21%

FIXED INCOME

↗ Price breakouts (cross-up 20D MA)

• IEI - iShares 3-7 Year Treasury Bond ETF · 20D perf: unch.

• VTIP - Vanguard Short-Term Inflation-Protected Securities · +0.16%

↘ 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.

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

None on the close

SPECIALTY

No event on the close

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.