Firstly, I should note that in all my years of trading, about 23 at this point, I've really only found that high beta and/or tech names work well for swing trading. Sure, I could go defensive when the market says to and trade in low vol names like DUK, WEC, REG, but I'd rather hold out for the movers.
In April and May, just about everything was moving together and swing trading was easy. You could find doubles pretty regularly. Below is the chart of high beta vs low volatility. When high beta names are leading, they are both more volatile individually while also moving together with force in the same direction, which pushes up index volatility and we see clean trends. You can see that clearly in the April-May timeframe below too.
https://preview.redd.it/xlr1hi4kc6oh1.png?width=1556&format=png&auto=webp&s=24a3eb18ecece347c0c0e48cc1d621427411798d
This ratio has been in a much tighter range since early August and this looks like a decision point. If high beta can start to lead low volatility again, breaking from the upper orange line, then that same dynamic should materialize.
Headed into the week, of the 26 major themes I track, you can see that the majority are either weakening or lagging. Not exactly strong breadth. That said, the HB : LV spread is up, so follow through determines whether anything develops from here or this flops.
https://preview.redd.it/auk5ohq0d6oh1.png?width=489&format=png&auto=webp&s=e4ed3320517236bba862b82f010077bc9c2520f8
Finally, strength exists in some pockets. Markets are very concerned about ballooning debt, high inflation from Iran war, high inflation from tariffs, and a host of other things. Yields are soaring, dollar is debasing, money has been accordingly rotating into gold, crypto, and indeed some defensive positions.
Strength has emerged in blockchain and crypto, and continued strength there means some of the names to watch could turn into trade entries: IREN, RIOT, COIN, HOOD, HUT are some of the names I'm watching.
There's also a bit of strength returning to themes like AI power and in memory. Names I'm keeping an eye on are MU, KLAC, OKTA, CEG, BWXT, TLN.
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Balance all this with what we're really seeing with our own two eyes though: index chop, individual name chop, and heavy intraday chop at times, though this last one looks to be resolving some at least. But there are some clear things to watch to make an informed decision on whether or not full size allocations are to be deployed.