Overtime
Relative strength
Good morning,
Today’s focus is on relative strength: Groups that have it, and groups that don’t.
We’ll be looking exclusively at ETF charts, so any idea is potentially actionable.
And while we recently raised some cash in our models, the primary way I believe in adding value to a portfolio is by overweighting stocks and industries with relative strength and underweighting those that don’t.
Today, we’ll feature those on an industry/sub-sector basis in the US and a country-specific basis for international markets.
Let’s get into it!
Relative strength: US equities
SOXX: iShares Semiconductor ETF
SOXX didn’t just hit new relative highs last week, it broke out to absolute highs. Taiwan Semi earnings (Thursday before the bell) will be important to how this group finishes the week, but the recent rotation from the memory names to the index heavy-weights like Broadcom and Nvidia certainly seems healthy.
QQQJ: Invesco NASDAQ NextGen 100 ETF
I think of the NASDAQ NextGen 100 ETF as having a lot of software names, but clearly that isn’t the case. Led by top holding Sandisk, QQQJ broke out to a 52-week relative high vs. the S&P 500 yesterday, and the base suggests more outperformance is on deck.
PSCT: Invesco S&P SmallCap Information Technology ETF
Want a fun fact almost nobody knows? How about small-cap technology closed at its highest level ever last week? PSCT hit fresh relative highs vs. SPX yesterday.
XBI: SPDR S&P Biotech ETF
We added XBI to our ETF models at the beginning of the month and it hit its highest level since 2021 yesterday. It has been a consistent leader for the past year, regardless of other market dynamics.
