The prevailing theme on the international front has been the rotation taking place out of the United States and into a wider set of global markets.

We've seen significantly elevated volatility, and there's now a strong case to be made that the worse is behind us. Many key U.S. indexes have retested their 2021 highs and have firmly held.

Now the question has become - will international still outperform if risk markets recover from here?

A key chart to watch on this front is Europe $VGK versus the United States $VOO.

When this black line is going up, it means that Europe is outperforming the U.S. (as has been the case for a few months).

Right now, the ratio is at a key inflection point. If we see this ratio take out its most recent lows, it would indicate that money is rotating back into the United States.

The ratio will be a key chart to watch when understanding the leadership of the next bullish phase.

While global markets have experienced heightened volatility in recent weeks, precious metals have remained a notable area of strength.

The VanEck Gold Miners ETF ($GDX) has just broken out of a major base and is now trading at its highest levels in over 12 years.

If equity markets continue to stabilize, this resilient group could remain a key area of leadership.

As long as $GDX holds above 45, the path of least resistance remains higher.

It's an incredibly fast moving market out there.

The S&P 500 just recorded its third best day on record - it's best since 2008!

In these markets, correlations spike to 1. In other words, as everything crashes, everything is basically trading together. Even the ETFs on our thematic list, despite being very different, are trading very similarly.

Yesterday signaled that the worst is behind us in the very near term. But what remains to be seen is how this story will progress as the U.S. retaliates against China.

These aggressive moves are very typical for bear markets, and looking out longer-term the risk is certainly still elevated in owning equities.

You can see the defensive rotation taking place as equity markets have sold off. Consumer staples and utilities are the two best areas of the market under our power rankings. Meanwhile, the poster child of the secular bull market, technology, is deep in the red.

A key chart to monitor is Consumer Staples $XLP priced in the S&P 500 $SPY. When this line is moving higher, it indicates that consumer staples are outperforming, which is a bearish signal.

Right now, the ratio is at a key inflection point.

I think with the indexes having retested their 2021 highs, the higher probability outcome is that consumer staples begin underperforming as money flows back into risk during an aggressive counter trend rally.

It's not often we see staples perform so well against the benchmark, and if this ratio were to continue ripping higher, it would be a cautionary signal to anticipate further downside in stocks.

Many key indexes have retested their 2021 highs following Trump's market crash.

Here's the S&P 500 $SPY revisiting its breakout level.

And here's the same story in the Nasdaq 100 $QQQ.

And similarly in the Dow Jones Industrial Average $DIA.

After market crashes, we often see sharp, aggressive countertrend moves. With the indexes now having fully retested their 2021 highs, this could be the point where we start seeing a notable rebound.

In other words, we've had the crash, and now I'm anticipating the sharp rebound.

As for where that will lead or whether Trump will back down—it’s tough to say. We can’t predict if we’re entering a more sustained bear market. But in the short term, a countertrend rally here seems to be a logical expectation.

After holding up for several weeks, many global markets are finally starting to feel the weight of the Trump tariffs.

What began as a U.S.-centric correction has now turned into broad, indiscriminate selling across markets and risk assets.

Financials and European markets had been showing some resilience amid the U.S. weakness — but that’s no longer the case.

Germany’s $EWG just broke down hard, failing to hold its long-term breakout in spectacular fashion.

Across Europe, more countries are now struggling to break out and hold key resistance levels.

After weeks of holding firm, the bias for Europe — and most global markets — has shifted sideways to lower.

Global markets have sold off in response to Trump's sweeping tariffs.

This is no longer just a regular dip in a bull market, it is turning into a significant cause for concern for more sustained weakness.

Two key industry groups to demonstrate this is housing $ITB, which has broken down and is now trending lower.

And semiconductors $SOX which has completed a major topping pattern.

Arguably the two most important industry groups have broken down, and are now in defined downtrends.

This isn't just a regular dip; unless we see risk assets take a significant rebound (and quickly), we're transitioning into a deeper correction that could last months, if not quarters.

Markets have sold off as Trump announced his sweeping tariffs to America's trading partners. There's certainly a lot of fast moving action hitting the tape and we're at a crossroads; does the market continue its selling or reverse on what was a monumental announcement?

While we certainly entertain these moves, the beauty of these rankings is that it adopts a longer-term horizon and smooths out the noise we're seeing this week.

More U.S. growth thematic ETFs are falling on the leaderboard, as technology breaks to new relative lows.

But despite this, a theme that's remained persistently strong is the video gaming and esports space. VanEck's $ESPO ETF, while pulling back, has exhibited fantastic relative strength in a market that's punished growth.

So long as ESPO is above its prior cycle highs near 80, this is an investment theme that remains a leader.

Technology $XLK is well into the red now as U.S. growth underperforms.

Most interestingly, Technology $XLK just broke down relative to the S&P 500 while Financials $XLF is still outperforming.

While the conditions in U.S. equities hasn't been favorable, it's not indiscriminately bearish. In other words, as technology underperforms, sectors like financials and communications are still holding in.

As investors find out more information on the Trump tariffs today; considering much of this recent money flow out of U.S. stocks has been driven by this rhetoric, it isn't outside the realm of possibility that tech bottoms here on a classic "sell the rumor, buy the news" event.

Of course, for now, the relative trend in tech is now down and we need to wait for confirmation of a trend reversal.

Large Cap Value $IWD has migrated to the top of the ETF Power Rankings for the US Indexes as growth continues to underperform.

Will growth continue underperforming?

This is the chart to look at it.

It's not over for growth until we see this ratio go below this line; I'd be surprised to not see growth begin outperforming as we hit this clear support level.

So while the trend has favored value for some time now, I wouldn't discount growth here.

The prevailing theme this year is that more international markets are challenging the dominance of the United States in equity performance.

This rotation has taken place for quite some time now and at least in the short-term it seems overextended.

A number of global ETFs are at big resistance levels and backed off last week. More importantly, as global markets stalled last week, this money did not flow back into the US.

This raises an important question; if international markets pause their gains, does this money flow into the U.S. markets (risk-on) or into safe haven assets (risk-off).

To demonstrate this point, here's a few examples.

Austria $EWO is near the top of the list and paused as it retested this resistance.

Singapore $EWS did the same.

And China $FXI is failing to hold this breakout.

And while international markets paused last week, the S&P 500 closed down 1.50% last week.

Not great.

It's clear that a structural shift is taking place here.

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The key theme here is the relentless strength out of the precious metal ETFs.

You can see below how they're clearly inhabiting the dark green.

With Silver looking like it's about to explode higher, this theme remains a no brainer until these trends can shift.

Meanwhile, software stocks - which have been a historical area of outperformance in the U.S. markets - have weakened to red territory.

This comes as growth has given up its leadership as money has rotated into prior laggards.

Just check out how Software $IGV has fallen into a downtrend.

Compare this with the relentless bid in the gold and silver miners - it's night and day.

There is so much alpha in the precious metals space right now.

The commodity supercycle is in motion, and the biggest opportunities are still ahead. JC and Jason nailed the gold trade last year — now they’re tracking the next wave. You can catch the replay to a recent live gold strategy call to see how they’re positioning.

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