With the multitude of action and performance divergence in the near-term from asset classes and sectors, the NDW DALI Tool has highlighted notable shifts in relative strength.
Action during the last two weeks’ worth of trading (1/15 – 1/29) has seen the hot start for domestic equity indices cool off, especially compared to international equites and commodities. While the S&P 500 Index (SPX) has gained 35 basis points (1/15 – 1/29), that return pales against the index’s 1.45% performance in the front half of the month from 12/31/25 to 1/15/26 - as well as broad international equity and commodity indices’ returns for the back half of January. Within the past two weeks, the iShares MSCI ACWI ex-US ETF (ACWX) has gained 2.45%, led by emerging markets with the iShares MSCI Emerging Markets ETF (EEM) gaining over 4% (1/15 – 1/29). During the same period, the iShares S&P GSCI Commodity-Indexed Trust (GSG) has rallied an impressive 9%, championed by precious metals with a notable rise in energy-related commodities natural gas (NG/) and crude oil (CL/).
With the multitude of action and performance divergence in the near-term from asset classes and sectors, the NDW DALI Tool has highlighted notable shifts in relative strength. Below are a couple of major themes worth monitoring.
Thursday’s report highlighted the closing gap between domestic and international equities along with a long-term relative strength between two broad equity representatives seeing change in signal favoring international equities for the first time in 20 years. Additional examples of relative leadership under the hood of international equities over domestic are below.
Emerging markets furthered the case for its current leadership within the asset class following the iShares MSCI Emerging Markets ETF (EEM) giving an RS buy signal against the iShares Russell MidCap ETF (IWR) after Monday’s (1/27) trading. Prior to the change in RS signal, the relationship had favored the mid cap ETF (IWR) since September 2018, but mid caps have generally been favored over emerging markets since early 2011. Going back to the early-90s, the one notable period of highlight and superior performance for EEM came from April 2002 to June 2007 (4/18/2002 – 6/15/2007) as EEM gained more than 200%, outperforming IWR by more than 130%.
Along with broader emerging markets, the Pacific region apart from China has also seen positive relative strength against equally weighted large caps. The RS chart of the Vanguard FTSE Pacific ETF (VPL) gave an RS buy signal following Tuesday’s (1/27) after having been on an RS sell signal since April 2010.
These RS chart examples along with Thursday’s article adds to the positive evidence for international equities compared to domestic, setting up a potential change in asset class leadership. While the trip to the number one spot within the NDW DALI Asset Class Rankings was brief for international equities in April 2025, broader region and international funds seeing signals change for the first time in decades adds significance to this recent rise by the asset class.
While still a potential impact on the asset class rankings has yet to be seen, the rally within energy related commodities has brought about positive near-term relative strength for the broader asset class compared to domestic and international equities. This week’s action brought both RS charts comparing the Invesco DB Energy Fund (DBE) to the SPDR S&P 500 Trust (SPY) and iShares MSCI EAFE ETF (EFA) into columns of Xs after having been in Os since December. In both cases, this places the RS charts closer to potential signals switches than the prior reversal in November 2025.
Much of the long-term relative strength within commodities resides within precious metals, but the resurgence in energy to kick off 2026 adds a near-term trend to monitor to see if expansion in commodity leadership occurs.
Though the impact has yet to transpire for commodities, the recent uptick within the energy sector within domestic equities has brought notable changes to relative strength among the sector rankings within DALI. Energy is the most improved sector within the rankings in 2026 with a gain of 26 signals, moving the sector from ninth to sixth. This week’s action has seen energy proxies take signals from sector leadership, bringing about a change to the top sector in the process. The RS charts comparing the Invesco S&P Equal Weight Energy ETF (RSPG) to the Invesco S&P Equal Weight Financials ETF (RSPF) and the iShares North American Tech-Software ETF (IGV) switched to RS buy signals following action on Wednesday (1/28) and Thursday (1/29). The RSPG versus RSPF RS chart had been on an RS sell signal since August 2024, while the RSPG versus IGV RS chart had been on an RS sell signal since April 2025.
After overtaking consumer cyclical for sixth within the NDW DALI Sector Rankings during this week’s trading session, the gap between energy and the fifth ranked sector, financials, now resides at 24 signals. If energy moves into fifth position, it will mark the first time in two years the sector has ranked within the top half of the DALI Sector Rankings. To stay tune to changes within the DALI rankings, users can click the Set Alerts button in the upper right-hand corner of any of the DALI pages on the platform.
