Ceasefire Extended, Gold Breaks, and the Rotation Gets Messy
Trump Extends Truce Indefinitely, GLD Prints a Gravestone Doji, Oil Whipsaws Between $90 and $93, and the Tech Leader Holds While
Below is an assessment of the performance of some of the most important sectors and asset classes relative to each other with an interpretation of what underlying market dynamics may be signaling about the future direction of risk-taking by investors. The below charts are all price ratios which show the underlying trend of the numerator relative to the denominator. A rising price ratio means the numerator is outperforming (up more/down less) the denominator. A falling price ratio means underperformance.
LEADERS: THE TECH TRADE HOLDS AS EVERYTHING ELSE CONSOLIDATES
Energy (XLE) – Still the Three-Month Leader Despite the One-Month Unwind
Energy’s three-month ratio vs SPY is +15.8%, with six-month at +22.8% — the strongest durable lead in this report. But the one-month ratio has collapsed to -12.7% as WTI oscillates between the high $80s and low $90s on ceasefire headlines. Tuesday saw WTI close at roughly $92 after Vice President Vance cancelled his Pakistan trip, then ease back to roughly $90 Wednesday morning after Trump announced the ceasefire would be extended indefinitely pending an Iranian proposal. XLE is up on Apr 21 at $55.87 vs $55.02 Apr 17, but the trend structure is deteriorating. If the ceasefire holds into May, this ratio likely rolls from leader to laggard within two weeks; if talks collapse again, the three-month lead could reassert.
Technology (XLK) – The One True Leader of the Week
Technology is now the single cleanest leader in the book — ratio vs SPY at +4.4% three-month, +5.5% one-month, with Tuesday’s 0.1% gain on an otherwise-weak tape confirming relative strength. XLK closed at $154.69 on Apr 21, barely changed from $154.35 Apr 17, while SPY pulled back 0.9% on the week. Tesla’s Q1 print arrives after today’s close with Street expecting non-GAAP EPS of roughly $0.33 vs $0.27 a year ago — that line alone will decide whether the tech leadership extends or rolls over. The macro setup still favors long-duration growth: 10-year at 4.30%, credit spreads at 2.87%, and the VIX just under 20. Both the three-month and one-month signals are moving in the same direction for the first time since March.
Emerging Markets (EEM) – The Peace Dividend’s Cleanest Beneficiary
EEM/SPY is +5.1% three-month, +3.1% one-month, and +12.1% six-month — the most consistent leader in this report. Every dollar WTI stays off its spike highs flows directly into the P&L of India, South Korea, and Southeast Asia; the DXY at 98.35 is higher than recent weeks but still well below its 2024 highs, preserving the currency tailwind. Tuesday’s 0.3% EEM decline was half the S&P’s drawdown, and the one-year lead of +9.8% versus SPY makes this the structural relative-strength trade of 2026. Trump’s ceasefire extension announcement Tuesday night caps upside on the peace-trade thesis, but any resolution that keeps Hormuz open favors this cohort disproportionately.
Industrials (XLI) – Reshoring Narrative Holds
Industrials have re-entered the leader column on a three-month lookback (+1.7% vs SPY), with the six-month ratio at +6.1% reflecting the durable reshoring, defense, and data-center-buildout narratives. XLI fell 1.1% on the week to $171.44 as cyclicals absorbed the Iran vessel-seizure headlines, but the longer-horizon trend remains constructive. This is the sector that typically moves with small caps on Fed-pivot trades and with materials on reshoring trades; when both those narratives are alive, industrials lead. The one-year relative performance is only +2.4%, so this is a newer leadership claim than energy or tech — one to watch for confirmation into earnings.
Materials (XLB) – Precious Metals Wobble, But Base Metals Hold
Materials are +4.1% three-month and +11.0% six-month vs SPY. The sector fell 0.5% on the week as precious metals cracked on Tuesday — gold closed near $4,820 spot and silver near $80 after a gravestone-doji print in GLD that Dave Keller flagged in Tuesday’s technical recap. Base metals remained firmer: copper, platinum, and industrial metals held their weekly gains per the Trend Following Week in Review. The AI-buildout and tariff-substitution narratives are independent of the Iran ceasefire, which is why XLB maintained leader status even through the Tuesday selloff. The six-month ratio extending to +11.0% keeps this the most durable non-tech leader in the report.
Real Estate (XLRE) – Barely a Leader, But Still a Leader
XLRE/SPY is +3.6% three-month but only +0.02% one-month — the weakest leader signal in this report. The 10-year yield rose to 4.30% Tuesday from 4.26% Monday, pressuring the rate-relief trade that had pushed REITs higher for three consecutive weeks. XLRE closed at $43.78 on Apr 21, down 0.3% on the week. Data center REITs and single-family rental REITs remain the specific engines, but until the 10-year settles back below 4.25%, this leadership claim is fragile. If the Fed’s May meeting signals no pivot, this ratio likely falls into laggard territory by next week.
Russell 2000 / Small Caps (IWM) – Breadth Story Intact
IWM/SPY is +1.6% three-month and +4.4% one-month, with the one-year lead of +9.6% the clearest confirmation that breadth is participating. IWM closed at $274.51 on Apr 21, down 1.0% Tuesday as the broader cyclical complex pulled back, but still up 2.2% on the week and +11.4% YTD against the S&P’s +3.2%. Lower oil reduces input costs disproportionately for small caps, a softer dollar (at 98.35, off recent highs) lifts the export-oriented cohort, and credit spreads at 2.87% keep leveraged small-cap balance sheets priced for stability. Tuesday’s 1% drawdown is the first real test of this leadership since March — if small caps recapture 2,800 this week, the breadth story extends.
European Banks vs U.S. Banks (EUFN/XLF) – The Transatlantic Divergence Extends
EUFN/XLF is +6.8% one-month, +5.1% three-month, +13.8% six-month, and +19.6% one-year — still the single most durable cross-asset trend in this report. European banks continue to benefit from lower oil compressing eurozone energy costs, ECB dovishness, and equity multiples that start from a lower base. U.S. banks by contrast remain pinned by a flattening yield curve (2Y at 3.81%, 10Y at 4.30%, spread of just 49 basis points), frozen M&A, and Basel III endgame uncertainty. EUFN fell 1.0% on the week to $37.89 but XLF also underperformed, keeping the ratio intact. The next catalyst is the April 30 ECB meeting.
Gold (GLD) – Leader On Trend, But the Gravestone Doji Is a Warning
Gold’s one-year standalone return is +36.1%, the largest in this report, and the six-month gain of +16.4% keeps the structural hedge bid intact. But Tuesday printed a gravestone doji in GLD with the ETF closing at $429.57, down 2.8% from Monday’s $442.09 — a pattern that Dave Keller flagged as a potential exhaustion signal. Silver fell 4.4% intraday Tuesday. The 3-month ratio vs SPY is now flat at -0.5% and the one-month is -4.3% as risk assets outperform the hedge. Trump’s ceasefire extension was the catalyst; if the truce holds, gold’s premium compresses further. But the structural bid — central bank demand, Indian jewelry cycle, de-dollarization — is still there. This is the trickiest call in the report: leader on standalone trend, laggard vs equities on one-month.
LAGGARDS: DEFENSIVES KEEP UNWINDING AND CREDIT IS CAPPED
Health Care (XLV) – Still the Worst Sector
