Wednesday Brings a Broad Relative Rebound

SUMMARY

At Wednesday's close, the clearest shift in our ETF universe was a broad rebound in relative strength away from SPY, with international equities, cyclical pockets, and parts of fixed income all pushing back above their 20-day moving averages. The important nuance is that most of those ratio moves still come with negative 20-day returns, so this reads more as early stabilization in lagging leadership than as a clean handoff to durable outperformance. Absolute price confirmation was narrower, centered on semiconductors, momentum, and bitcoin, while dividend growth slipped on a relative basis and floating-rate Treasuries softened. We see improving rotation breadth, but conviction is capped because most of the leadership signals are rebounds from recent underperformance rather than established strength.

KEY TAKEAWAYS

- Relative improvement broadened across emerging markets, Japan, China, materials, discretionary, and the Dow versus SPY, but most remain in 20-day relative drawdowns.

- Within fixed income, MBS showed the strongest quality of leadership versus AGG, while international bonds improved only tentatively and USFR lost some absolute support.

- Absolute upside confirmation was selective rather than market-wide, with SMH, MTUM, and IBIT reclaiming their 20-day moving averages.

BOTTOM LINE

Our short-term read is that rotation is widening across ETFs, but the stronger message is stabilization in former laggards, not decisive new leadership. Until more of those relative rebounds are matched by positive 20-day returns, we would treat the move as constructive but still provisional.

TECHNICAL SIGNAL EVENTS

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ABSOLUTE PRICE SIGNALS

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Above 20D moving average:

IBIT - iShares Bitcoin

Last: $40.17 | 20D Return: +2.40%

MTUM - iShares MSCI USA Momentum Factor ETF

Last: $247.18 | 20D Return: -3.50%

SMH - VanEck Semiconductor ETF

Last: $399.02 | 20D Return: -6.37%

Below 20D moving average:

USFR - WisdomTree Floating Rate Treasury

Last: $50.16 | 20D Return: -0.02%

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RELATIVE STRENGTH SIGNALS

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Above 20D moving average:

BNDX / AGG - Vanguard Total International Bond

Ratio: 0.4851 | 20D Relative Return: -0.14%

DIA / SPY - SPDR Dow Jones Industrial Average ETF

Ratio: 0.7066 | 20D Relative Return: -1.07%

EEM / SPY - iShares MSCI Emerging Markets ETF

Ratio: 0.0874 | 20D Relative Return: -4.55%

EWJ / SPY - iShares MSCI Japan ETF

Ratio: 0.1290 | 20D Relative Return: -3.51%

FXI / SPY - iShares China Large-Cap ETF

Ratio: 0.0548 | 20D Relative Return: -1.39%

IBB / SPY - iShares Biotechnology ETF

Ratio: 0.2524 | 20D Relative Return: -0.42%

IQLT / SPY - iShares MSCI Intl Quality Factor ETF

Ratio: 0.0701 | 20D Relative Return: -2.61%

IVLU / SPY - iShares Edge MSCI Intl Value Factor ETF

Ratio: 0.0599 | 20D Relative Return: -3.71%

MBB / AGG - iShares MBS ETF

Ratio: 0.9558 | 20D Relative Return: +0.08%

MCHI / SPY - iShares MSCI China ETF

Ratio: 0.0862 | 20D Relative Return: -1.73%

VWO / SPY - Vanguard FTSE Emerging Markets

Ratio: 0.0827 | 20D Relative Return: -3.09%

XLB / SPY - Materials Select Sector

Ratio: 0.0752 | 20D Relative Return: -1.56%

XLY / SPY - Consumer Discretionary Select Sector

Ratio: 0.1686 | 20D Relative Return: -0.27%

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Below 20D moving average:

VIG / SPY - Vanguard Dividend Appreciation

Ratio: 0.3291 | 20D Relative Return: -0.05%

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