Four different relative relationships are moving in different directions at the same time.
Here’s the chart:
Let's break down what the chart shows:
The top-left panel shows Semiconductors relative to the S&P 500
The top-right panel shows Software and Services relative to the S&P 500
The bottom-left panel shows Small Caps vs Large Caps
The bottom-right panel shows Growth vs Value
The Takeaway: At the sector level, leadership looks defensive.
Staples are moving higher. Technology is moving lower.
If sectors are the only input, that is the conclusion most reach.
But leadership is still showing up elsewhere.
Money is rotating through size and factor at the same time sector leadership splits. Small Caps are outperforming Large Caps. Growth and Value are not moving in lockstep. Money is choosing, not exiting.
Leadership does not disappear when sectors send mixed signals. It is shifting location. It is showing up in relative relationships that sit outside the standard sector view.
This is where most traders get it wrong. They treat sector rotation as the whole story. When sectors turn defensive, they assume leadership is gone.
Markets do not require sector confirmation to rotate. Money can move aggressively inside equities without the index making a statement. That movement still creates tradeable leadership, just not in obvious places.
If you stop at sectors, you are reacting, not tracking.
If you follow where money is moving, leadership is still present.
So, are you looking only at sectors, or are you looking for where leadership actually is?
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