Private markets have been in the limelight over the last few months with a big push to open those investments to a larger pool of investors. There are conflicting arguments around whether private credit or equity investments should be made more widely available, but the current trend has those in favor of expansion winning the debate. It’s likely that with the news coverage surrounding private markets, clients will be asking questions. Private market investments present a different level of risk than normal, particularly due to differing regulatory standards and pricing methods.

One of the touted benefits of private investments is that they have less volatility. This is more of a half-truth than many would like to admit as the “lower volatility” is in part due to private investments not needing to be marked to market, particularly in times of distress. As these investments become more widely available and presumably more liquid, prices will be much closer to a marked to market framework. Secondly, regulatory standards may change rapidly due to private markets opening up, but a recent example shows that things can get quite gray in the private market space. Tricolor Holdings, a subprime auto lender, filed for Chapter 7 bankruptcy with its asset-backed securities eventually trading as low at 12 cents on the dollar less than two months ago. Major banks like JPMorgan (JPM), Fifth Third Bancorp (FITB), and Barclays (BCS) were noted to have exposure. While Tricolor’s business model was very risky as they focused on marketing to customers excluded from traditional banking systems, like undocumented immigrants (68% of its borrowers had no credit score and over half didn’t have a driver’s license), the real undoing of Tricolor was its alleged fraud involving pledging collateral more than once to different lenders (Bloomberg). While this is a single case, it does show how fast things can change in the private credit and equity markets.

While private markets open the doors to a lot of unknown and potentially higher volatility than expected, this is also what drives the prospect of greater returns. There is not much price history on some of the new private credit/equity ETFs that have recently hit the market, but there are publicly traded stocks that are heavily involved in private markets that can give us some insights into how direct exposure may unfold. For some of the big players in the space displayed in the image below, only one has an acceptable technical attribute rating, Carlyle Group (CG). The recent performance of these stocks has been less than ideal with an average one-year return of -17.90% while compared to the S&P 500’s return of 14.08% over the same period. However, on the longer three-year time frame, one can see the allure of private market exposure. The average return of the six stocks is in line with the SPX over the last three years, but there are some big winners like Apollo Global Management (APO) and KKR & Co. (KKR) which each gained over 100% in the last three years. Don’t forget, that includes the less than -20% one-year return for both APO and KKR. Overall, private markets offer a unique opportunity for investors. Despite the risks being higher than many advertise, the general investment rule that higher returns require higher risks is still true and managing that risk is why having a process when evaluating investments (public or private) is paramount.

If you have read the report recently, listened to NDW’s podcasts, or really visited any form of NDW research over the last month or so, you will have undoubtedly picked up on the fact that participation is declining. While this on its own isn’t an inherently bad thing, it can leave markets on rocky footing in the event that we do see an exhale to close out the year. Perhaps the most ominous of our flagship participation indicators is the short-term ^TWSPX (S&P 500 stocks trading above their 50-day MA), which has ground lower since the mid-point in the year. While the indicator certainly hasn’t washed out on a major exhale like we saw during April’s tariff tantrum, it would be quite difficult to find a chartist out there that would say the chart looks “good” by any version of the word. While many NDW loyalists will be familiar with indicators for the NYSE or SPX, a more astute analyst takes time to look under the hood to gauge what parts of the market are gaining or losing strength. After all, while the saying “a rising tide lifts all ships” certainly can be true, many of us would probably like to ride said tide higher in a yacht over a skipper….

There are several ways to peel back the onion, many of which we have covered throughout the years. For the sake of today’s featured article, we will visit two areas of the platform: the matrix and the technical indicator report. NDW’s pre-made group matrix brings together 40 different unique sectors (and the benchmark SPXEWI) into a relative strength arm-wrestling contest. As with other matrices around the platform, strong representatives are names you would want to look towards for investment. As you might expect, precious metals remains atop the heap despite a recent pullback recently. Other risk on sectors litter the top half of the matrix, seeing the likes of semiconductors, computers, and electronics, all score within the top 10. On the other hand, points of weakness are largely consistent from other points in the year. Traditionally risk-off groups remain towards the bottom of the rankings.

So is that it? Should we be satisfied with this level of analysis? While we could rely completely on the matrix, we can overlay an additional layer for today’s feature. This added analysis allows us to blend together overall sector relative strength with the topic of participation drop-offs mentioned at the start of the piece. The table below displays the current sectors, their overall rankings, their current bullish percent readings and how that value has changed over the last month. For the uninitiated, bullish percent charts help measure the percentage of stocks within a group trading on PnF buy signals, helping us gauge an intermediate term picture of strength. The chart is a touch busy… but simply put we are trying to analyze if high RS groups are narrowing at a different rate than other areas of the market. There are a few interesting points to note:

• The top half of the rankings still show on average higher participation levels (48% for top half vs. 35% for bottom half)
• Despite this, the top half has seen more intense declines in participation over the last month. The top half has seen their average BP chart fall by ~-10% over the last month, compared to just ~-5% for the bottom half.
• Most of this decline in participation comes from the top groups- the strongest ten names within the matrix have seen their BP charts fall by an average of ~-16% this month
• No sector is really accelerating in participation-  only three sectors actually moved higher (oil services, steel, & gaming.) There were a handful of sectors that stayed the same.
• The S&P 500 equal weight index sits smack-dab in the middle of the rankings, earning the 21st spot with just under half the index sitting on buy signals.

Adding the participation layer adds in some complexity- you can see that the top of the matrix is the group narrowing the most. Remember, participation does not always equal performance, but it can offer some insight into how different sectors stand. While the data doesn’t suggest any sectors towards the bottom are making threatening moves higher, it does warrant that we watch those leaders if participation continues to wane.

Each week the analysts at NDW review and comment on all major asset classes in the global markets. Shown below is the summary or snapshot of the primary technical indicators we follow for multiple areas. Should there be changes mid-week we will certainly bring these to your attention via the report.

Remember, these are technical comments only. Just as you must be aware of fundamental data for the stocks we recommend based on technical criteria in the report, so too must you be aware of important data regarding delivery, market moving government releases, and other factors that may influence commodity pricing. We try to limit our technical comments to the most actively traded contracts in advance of delivery, but some contracts trade actively right up to delivery while others taper off well in advance. Be sure you check your dates before trading these contracts. For questions regarding this section or additional coverage of commodities email james.west@nasdaq.com.

Data represented in the table below is through 11/11/25:

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