In my post last week I shared that pockets of strength were emerging as the spread between high beta stocks and low volatility ones had decreased drastically ([Post linked here](https://www.reddit.com/r/swingtrading/comments/1vjrwv5/its_a_split_market_but_swing_trading_pockets_of/)). That was a clear, strong signal that money was flowing out of low volatility (not good for swing trades) into high beta (what I want to trade).
That factor flipped from -1.7 last week, with high beta still lagging but improving, to +7.6 this week, high beta well outperforming low volatility. That data was enough for me to get aggressive and the result was my swing portfolio hiting a new high as I realized profits throughout the week.
Themes highlighted a week ago like drones, robotics, space economy, quantum computing, gold and metals have all either broken out as new leaders or continue to improve. Zooming out a bit, 55% of the themes I track are either leading or improving, and that’s real strength. It’s not overheated, but a sign that breadth is strong.
The semiconductor complex, which includes other themes connected to semis like optics, lithography, photonics, and others, continues to improve. I am seeing something common across several of the ETFs as well as stock names: consolidation at the 50-day moving average. You can see this in ETFS like PSI, CHPS, XSD, and in individual stocks like TSM, LRCX, MU, and more. Clearly a move through, above, or away from the 50-day will set the stage for intermediate trend development.
This may sound really bullish, and it mostly is. However, this is just a recap of the data and things change quickly. These observations also present conditions to watch for breakdowns, and I will track those accordingly to see if current conditions hold up.