Below are highlights from the NDW Morning Update Video for the morning of 8/19. Access the video on the NDW Morning Update Video page. 

• US equity futures are roughly flat this morning after the S&P was down for a third consecutive day yesterday.
• Semiconductors were among the biggest laggards as the iShares Semiconductor ETF (SOXX) was down a shade under 5%.
• About 55% of the stocks in the S&P 500 (SPX) finished the day in the red and there 175 52-week lows on the NYSE, the most since March. That said, there was no significant movement in any of our major participation indicators.
• Crude oil returned to a buy signal on its default  chart on Monday with a double top break at $85.  Energy has moved back to the top spot in the DALI commodities rankings.
• Yesterday’s research feature focused on volatility (or the lack thereof) in US equities. The S&P 500 notched its 27th all-time high of the year this week and the VIX fell to 14.25 on its default chart, close to its 52-week low.
• Minutes of the last Fed meeting are due to be released this afternoon. The fed futures market is still pricing in about a 65% chance of a rate hike this year.
• Walmart (WMT) is scheduled to report earnings before the open tomorrow. WMT is currently an acceptable 3 for 5’er. The stock sits on two consecutive sell signals but has recently made a higher low after finding support at $108 and $110. $108 is a key support to watch as it is WMT 2026 low and a level from which it reversed up twice in last month’s trading.

Domestic and international equities have been focal points of relative strength within DALI’s asset class rankings over the last several months. However, with movement earlier this week, we saw domestic equities move back to top spot in DALI for the first time since February, leaving international equities closely behind in second. However, the shift in favor of the US market hasn’t been due to weakness from foreign markets. Over the last three months, international equities picked up 8 signals, but domestic equities gained 23 signals over that same span, underscoring the recent strength of both groups.

Changes at the top of DALI are important to take note of, as the power of number one has a long track record of success. Investing in the top asset class at the end of every month would have grown a portfolio of 100k to more than 500k since the start of 2000, outperforming not only the average asset class but also the S&P 500. Meanwhile, avoiding the laggard asset classes has been equally important, as the bottom ranked asset class has lost money over the last 26 years.

Both domestic and international equities remain key areas of emphasis, even with domestic equities taking the lead. The two asset classes are separated by a single signal, meaning their positions could swap at a moment’s notice. Additionally, both groups maintain a substantial lead over other asset classes, as international equities hold a 123-signal lead over the third ranked commodities group. With global equities sitting head and shoulders above their peers, investors should continue to focus on US and foreign stocks, as the market’s risk-on positioning remains firmly intact. 

One of the most famous sayings around the NDW office is the idea that “assets go in and out of favor like produce at the supermarket”. At its core, this simply means that stocks can naturally rotate as simply as your fruits and veggies at your local grocery store. After all, even the novice chef understands that a lower supply of seasonal berries in the winter means a higher price at checkout… and typically worse taste at the dining room table. This principle is the centerpiece of virtually every one of Dorsey Wright’s strategies—picking your “seasonally accessible” stocks and leaving your “seasonally out-of-favor” on the trading room floor. You’ll see this concept in play in our models, TA scoring system, etc. Since most of us deal primarily with domestic equities, it is easy to think about utilizing momentum solely on the domestic front. However, the practice of finding the “in-season assets” can be put in play around the globe. Today’s feature will discuss utilizing this momentum backed approach on the emerging front, which despite a bit of a downtick off highs, remains a largely productive environment for trend followers.

The phrase “productive for trend followers” can be a bit vague. The NDW analyst team uses relative strength (RS) spreads to quantify the difference in strength between high RS names and low RS names. Put simply, a larger spread implies a wider dispersion between winners and losers, which could lead to a more productive environment for momentum backed strategies. We reference these spreads from time to time, most recently discussing the slight contraction of RSSPREAD as some rotation occurred off recent highs. RSSPREAD quantifies the dispersion on the domestic front, but we can run a similar test on the international front. Those values are included below, showing the developed spread on the left and emerging on the right. While both spreads have slipped slightly (signifying less leadership from high RS names) the emerging spread has shown some more resilience in the space. While we won’t focus on it at length today, broader participation has continued to expand on the emerging front, evidenced by a reversal higher by ^BPMUEMRGE@2, signaling more emerging funds trading on PnF buy signals. It is also worth noting that as of 8/18, Domestic Equities managed to overtake International Equities within the NDW DALI rankings, pushing internationals to second. However, both groups still outpace 3rd placed commodities by a wide margin and see buy signal counts meaningfully above their low water marks from 2026. Said more plainly, despite the movement in overall rankings there remains an array of technically strong options within internationals- options we will look to highlight through the rest of this piece.

Knowing that a more productive trend following environment exists is one thing—taking advantage of it is another. The Invesco Dorsey Wright Emerging Markets Momentum ETF (PIE) aims to do just that, deploying a relative strength overlay to a basket of emerging market stocks to select those assets that are “in-season.” You can read more about the selection criteria and recent changes in our most recent quarterly update, linked here. PIE holds a near-perfect 5.89 fund score, outpacing broad emerging benchmark EEM by nearly 2-full points (3.95 fund score as of 8/18). PIE has gained ~42% so far this year, roughly double that of EEM (12/31/25 - 8/17/2026).

Diving underneath the hood, we can focus on the differences between the funds and their respective underlying holdings using NDW’s fund comparison tool. Focusing on the country exposure first, we can see that the tactical nature of PIE is leading it to heavily overweight Taiwan (49% vs. 22.5%) and South Africa (5.0% vs. 2.9%). Of course, where you overweight isn’t the only important item—we have found that underweighting specific areas can also be quite important to the long-term success of a strategy. Notable differences include EEM’s ~14% allocation to India, a group which finds itself with no representation within our strategy as of 8/17 as the space is a point of weakness. China (mainland and Hong-Kong) and South Korea are also notable underweights. We can complete the same practice from a sector perspective, where industrial names stand out as a large overweight in PIE vs. EEM. It is also important to emphasize that momentum strategies are self-correcting. If one asset out (under) performs for long enough, it will rotate in (out) of the underlying holdings over time.

Disclosures:

This article is intended for Financial Professional Use Only.

Management and other expenses can have a material impact on performance when compounded over time. Past performance, hypothetical or actual, does not guarantee future results. In all securities trading there is a potential for loss as well as profit. It should not be assumed that recommendations made in the future will be profitable or will equal the performance as shown.

Click here for more information from Invesco on the  Invesco Dorsey Wright Emerging Markets Mo ETF (PIE): https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=PIE

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 8/18/26:

Portfolio View - Commodity Indices

Cryptocurrency Update

Cryptocurrency Video (4:06)

The option suggestions featured here are pulled from the NDW Options Ideas tool. These are just a sample of the ideas that can be found there. The Options Idea tool contains numerous additional income and speculative plays. It also offers relative strength-based screens targeting the highest (and lowest) relative strength stocks and ETFs that have recently moved counter to their longer-term trend. To access or subscribe to the Options Ideas tool, click here.

Call

J.P. Morgan Chase & Co. (JPM) Nov 20 $355 Call

Put

Generac Holdings, Inc. (GNRC) Nov 20 $210 Put 

Income (Covered Write)

Fortinet Inc. (FTNT) Sep 18 $170 Covered Write