The dollar (DX/Y])  has widespread implications for global markets, and when the greenback does move, its trends often last for a while, making it worth monitoring for most serious investors. However, recent action has been an exception to the currency’s usual consistency. After completing its fifth consecutive sell signal, the dollar reversed higher, breaking a double top at $100.50 as the market experienced a flight to safety. Since then, tensions in Iran have subsided, leaving the greenback to move lower and return to a sell signal. The dollar has now repeatedly tested resistance in the $100 to $101.50 range, only to reverse lower each time over the last year. Interestingly, the dollar saw extremely consistent support around the $101 to $100 level during 2023 and 2024, which appears to now be serving as resistance as well. If the dollar is truly going to turn a new corner and rebound, it will have to push through significant resistance around those levels. Meanwhile, the currency is without support until $96, leaving the path of least resistance to the downside for the time being. That said, the dollar would also initiate a shakeout pattern if it reversed back into Xs.

A decline in the dollar makes international equities and commodities worth more when converted into US dollars, so a falling dollar environment is relatively beneficial for the two asset classes. Conversely, a rising dollar serves as a headwind for international stocks and commodities, making domestic equities relatively more attractive in dollar terms. With the dollar back on the decline, international equities could continue to benefit, with the most international indices already reversing higher. The iShares MSCI EAFE ETF (EFA) previously moved to its first sell signal since last April, falling into correction territory. However, recent action has seen EFA move back to a buy signal while it’s one box away from matching previous all-time highs. EFA holds a solid fund score of 4.28, but that still lags 0.19 points behind the average fund score of the US Core Equity (S&P 500 Index funds) group.

Within international equities, emerging markets continue to demonstrate more relative strength than developed regions. The group saw even more downside than developed markets during the peak of the Iran conflict. The iShares MSCI Emerging Markets ETF (EEM) fell as much as 13.5%, entering correction territory as well. However, the group never moved to a sell signal and has since reversed sharply higher into a column of Xs. While developed markets have put on a solid performance over the last year and a half, it’s been emerging markets that have stolen the spotlight. EEM has gained 46% since the start of 2025, compared to 36% for EFA over that same period. Overall, emerging markets are a higher relative strength area, with EEM holding an extremely strong fund score of 5.47, which is a full point higher than the US Core Equity group.

With the global economy holding up while the dollar falls, international equities could put together a strong finish to 2026, especially if global conflict is resolved. The group continues to sit at the top of DALI ahead of domestic equities. Meanwhile, emerging markets should be a point of emphasis within its broader asset class given its relative strength.

This year, despite the volatility, equal-weight market representatives have done well relative to their cap-weight counterparts. Since 2022, the S&P 500 Index (SPX) has been on an unrelenting onslaught over the S&P Equal Weighted Index (SPXEWI). Entering the year, SPX had outperformed SPXEWI by more than 40% over the last three years, a feat that was last done in the late 1990s. This three-year performance spread has fallen to just under 30% in April, which is still historically elevated. However, our data set is confined to the early 90s through today, a small sample size to make any assumptions about the mean reversion tendencies of the rolling three-year performance spread between SPX and SPXEWI. While we did see eventual market leadership from SPXEWI during the aughts after SPX first outperformed SPXEWI over a three-year period ending in early 1999, it still took over a year before cap-weight dominance truly subsided. It is certainly not out of the question that the recent outperformance from SPXEWI over SPX is a brief break in a long-term trend of relative strength for SPX.

There is plenty of supporting evidence that the recent strength in equal-weight has yet to challenge cap-weight. On the SPX vs SPXEWI 1% relative strength chart, it still trades on a buy signal, which favors SPX on a long-term basis. The relative strength chart is in a column of Os, but the SPX only needs to outperform the SPXEWI by 1% from current levels to reverse back into Xs. If that were to happen, the cap-weight would be back in the driver’s seat on both long-term and short-term time frames. Interestingly, the reversal into Os brought the RS chart back to a prior area of resistance that is seemingly acting as new support. While we don’t necessarily view support and resistance the same way for trend charts compared to relative strength charts, it’s not something to write off completely for RS charts. Another important note on the RS chart is that it is still over 60% off its March 2000 high. As mentioned earlier, we’re looking at a small sample size of total market history. Nonetheless, be aware that the trend of cap-weight strength has and can continue to march on.

Looking at a more focused picture of the largest market-cap stocks, the iShares Top 20 U.S. Stocks ETF (TOPT) initiated a shakeout pattern last week and is just a few boxes away from completing the pattern. For those unfamiliar with the shakeout pattern, it is a chart pattern where a security in a positive trend forms a double top at a high, then reverses to give a sell signal (shaking out the weak holders), and then resumes the uptrend with a fresh buy signal upon a break of the double top. Second, TOPT still has an acceptable fund score of 3.41 after falling from near-perfect status at the end of last year. TOPT is a newer fund that launched near the end of 2024 and could be a good representative to watch for emerging weakness or strength in the largest stocks in the market. Overall, it is still technically sound, as is SPX over SPXEWI on a long-term relative strength basis. While we have seen equal weight representatives pick up in 2026, they still have a long way to go before dismantling cap-weight from the top spot.

Daily Option Ideas for April 14, 2026