Tactical Trends: US Cyclicals Slip as International Leadership Rebuilds

Relative winners shift to ex-US, low-volatility, and value.

International leadership rebuilds at the close on August 20, even as US cyclicals lose price support. Across our ETF universe, 40 of 59 equity ETFs (68%, -20.3pp on the day) hold above their 20-day moving average (20D MA), and 34 of 58 (59%, +15.5pp) hold above their 20-day ratio moving average vs the S&P 500 SPY (20D ratio MA vs SPY). Developed ex-US, low-volatility, and value clusters lead vs the benchmark, while small caps, financials, and China fill the price laggards. The equity read is a rotation away from US size and cyclical beta, with a 9pp gap between price participation and relative leadership.

Fixed income leadership is limited to high-yield credit, intermediate duration, and TIPS. 8 of 16 hold above their 20D ratio MA vs the Aggregate Bonds AGG, while EM debt, investment-grade credit, and Long Treasuries TLT lag. Bond participation concentrates in shorter duration and selected credit. The weak flank is rate-sensitive duration.

Specialty leadership is limited to gold, crypto, and biotech proxies such as Gold Miners GDX and Bitcoin IBIT. 7 of 15 hold above their 20D ratio MA vs the S&P 500 SPY, while semiconductors, infrastructure, and real estate fill the laggard cluster. Commodity alignment centers on oil and broad commodities, with copper on the weak flank. The non-equity mix favors hard assets and low-volatility specialty exposure.

20-Day Tactical Breadth

Key Takeaways

China Large Capitalization FXI, up 3.51% over the trailing 20-day window, crossed below its 20-day moving average. China MCHI, up 0.72% over the trailing 20-day window, crossed above its 20D ratio MA vs the S&P 500 SPY, so the China cluster splits between price weakness and relative improvement.

3-7yr Treasuries IEI and Short TIPS VTIP crossed above their 20D ratio MA vs the Aggregate Bonds AGG, and fixed-income cross-timescale alignment is 59%. 7-10yr Treasuries IEF and Long Treasuries TLT fill the laggard side, so bond strength concentrates in shorter duration and inflation-linked exposure, and the weak flank is rate-sensitive duration.

Managed Futures DBMF, down 1.05% over the trailing 20-day window, crossed above its 20D MA. DBMF also holds above its price MA and lags the S&P 500 SPY on a relative basis. Gold Miners GDX and Biotech IBB anchor the specialty leadership cluster, so hard assets lead and cyclical buildout themes lag.

FEATURED ETF: iShares China Large-Cap ETF FXI

Other Technical Signal Events

Equity: Price vs 20-day MA

Signal	Ticker	Name	20D perf
Cross-down	FXI	iShares China Large-Cap ETF	+3.51%
Cross-down	EWJ	iShares MSCI Japan ETF	+3.48%
Cross-down	QUAL	iShares MSCI USA Quality Factor ETF	+2.92%
Cross-down	XLP	Consumer Staples Select Sector	+2.54%
Cross-down	DIA	SPDR Dow Jones Industrial Average ETF	+2.18%
Cross-down	VIG	Vanguard Dividend Appreciation Index ETF	+2.10%
Cross-down	XLF	Financial Select Sector	+2.01%
Cross-down	IWM	iShares Russell 2000 ETF	+1.91%
Cross-down	VYM	Vanguard High Dividend Yield Index ETF	+1.69%
Cross-down	MDYG	SPDR S&P 400 Mid Cap Growth ETF	+1.60%
Cross-down	SLYV	SPDR S&P 600 Small Cap Value ETF	+1.40%
Cross-down	IJR	iShares Core S&P Small-Cap ETF	+1.03%

Equity vs SPY: Price Ratio vs 20-day MA

Signal	Ticker	Name	20D rel perf
Cross-up	XLK	Technology Select Sector	-0.68%
Cross-up	SDY	SPDR S&P Dividend ETF	-0.59%
Cross-up	JEPI	JPMorgan Equity Premium Income ETF	-0.34%
Cross-up	VWO	Vanguard FTSE Emerging Markets Index ETF	unch.
Cross-up	IYW	iShares U.S. Technology ETF	+0.15%
Cross-up	URTH	iShares MSCI World ETF	+0.28%
Cross-up	EWU	iShares MSCI United Kingdom ETF	+0.61%
Cross-up	MCHI	iShares MSCI China ETF	+0.72%
Cross-up	IVLU	iShares Edge MSCI Intl Value Factor ETF	+0.77%
Cross-up	XLB	Materials Select Sector	+0.90%
Cross-up	EFA	iShares MSCI EAFE ETF	+0.98%
Cross-up	EFAV	iShares MSCI EAFE Min Vol Factor ETF	+1.12%
Cross-up	XLC	Communication Services Select Sector	+1.67%
Cross-down	VTI	Vanguard Total Stock Market Index ETF	unch.
Cross-down	VB	Vanguard Small-Cap Index ETF	-0.55%
Cross-down	XLP	Consumer Staples Select Sector	-0.75%
Cross-down	IWM	iShares Russell 2000 ETF	-1.35%

Fixed Income: Price vs 20-day MA

Signal	Ticker	Name	20D perf
Cross-down	PFF	iShares Preferred and Income Securities ETF	+1.50%
Cross-down	EMB	iShares J.P. Morgan USD Emerging Markets Bond ETF	+0.59%
Cross-down	MUB	iShares National Muni Bond ETF	+0.47%
Cross-down	VCIT	Vanguard Intermediate-Term Corporate Bond Index ETF	+0.40%
Cross-down	LQD	iShares iBoxx $ Investment Grade Corporate Bond ETF	+0.24%
Cross-down	TLT	iShares 20+ Year Treasury Bond ETF	-0.60%

Fixed Income vs AGG: Price Ratio vs 20-day MA

Signal	Ticker	Name	20D rel perf
Cross-up	VTIP	Vanguard Short-Term Inflation-Protected Securities Index ETF	unch.
Cross-up	VGIT	Vanguard Intermediate-Term Treasury Index ETF	+0.11%
Cross-up	VCSH	Vanguard Short-Term Corporate Bond Index ETF	+0.13%
Cross-up	IEI	iShares 3-7 Year Treasury Bond ETF	+0.16%
Cross-down	IEF	iShares 7-10 Year Treasury Bond ETF	unch.
Cross-down	TLT	iShares 20+ Year Treasury Bond ETF	-1.10%

Specialty: Price vs 20-day MA

Signal	Ticker	Name	20D perf
Cross-up	DBMF	iMGP DBi Managed Futures Strategy ETF	-1.05%

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.