A [couple of weeks ago](https://www.reddit.com/r/swingtrading/comments/1v79jgb/for_swing_trading_rotation_away_from_growth_means/) I shared data from my dashboard that indicated tough trading conditions: Of the 62 themes I track, 15 were leading and 30 were lagging; not good for swing trades.
What a difference two weeks makes.
Today, 16 are leading, but only 11 are lagging and a whopping 22 are improving. That means swing traders have a growing group of stocks to choose from, and it looks like everything is breaking out while traders reach down the risk curve.
At that time, I shared the observation that we were beginning to see a rotation into high beta, momentum, and growth. With value stocks and low volatility dominant in June and July, that early bounce was a watch condition for me, and what we’re seeing now is the follow-through.
At the thematic level, we saw strength in drones and AI infrastructure, which is showing up today. Breakouts and reversals are well underway in stocks like UMAC, RCAT, AVAV, ONDS, AVEX. There are still opportunities here.
We know the AI trade got hit especially hard over the last month as capex concerns spread. There is a lot going on in this theme - too much to cover here - but there is early strength in smart grid, power, nuclear/uranium, and much more. While some of the tech megacaps are surging, strength appears to be spreading.
What I’m watching now are themes that are currently improving, listed in order of strength below. These must have logged a clear “improving” last week and still be there today, two days into this week.
*Note: The macro condition has not really improved that much and geopolitical tensions remain, but the strength of this rally shows that stress has not currently spread to equities. I suspect it will if we don't see some relief.*
https://preview.redd.it/0u0o2vw9wehh1.png?width=1323&format=png&auto=webp&s=2d5a9733ba59931f30ea88367e5ede78a2565733