Semiconductors Jumped 9.35%. Leadership Didn't Move an Inch

Semiconductors delivered a 9.35% week, yet every price-versus-average ratio cell for the SOXX/SPY pair remains negative. That is the core finding from TradeSentinelNotes' relative-strength review for the week ending November 13: the indexes bounced hard, but the leadership table did not change.

The bounce was real in absolute terms. Healthcare (XLV) gained 2.19%, staples (XLP) added 2.52%, financials (XLF) rose 2.66% and the equal-weight S&P 500 (RSP) advanced 2.37%. XLV, XLP, XLF and the DAX are positive across all eight absolute-strength cells. RSP and consumer discretionary (XLY) joined them: RSP reclaimed its 20-day average and its 50-day turned up, while XLY's 100-day reading improved.

What stayed the same?

The sector-ratio table looks much as it did a week earlier. Healthcare, staples, financials, equal-weight and the DAX remain green across all eight relative-strength cells versus SPY. XLP/SPY and RSP/SPY also strengthened their 150-day ratio trends. In plain words: the same defensive sectors still lead, and two of them extended their edge.

TradeSentinelNotes classifies this as a defensive-quality market inside a bounce, not a confirmed rotation back into growth. The technology and semiconductor rebound has not yet produced sustained relative strength. Rising yields and falling gold remain a headwind for long-duration growth, which the analysis says explains why a strong week in chips has not rewritten the leadership table.

What validates the defensive thesis?

XLV, XLP, XLF, RSP and the DAX keeping their fully positive ratio stacks versus SPY would support the established-leadership case, per the review. Technology, semis and software failing to turn their ratio cells higher would confirm that last week's rebound was a bounce, not a handover.

Energy's improvement is incomplete in the same way. XLE gained 5.42% and outperformed SPY by 2.75%, and its 50-day and 150-day ratio trends improved. But its 20-day ratio trend worsened, and price still sits below its 20- and 50-day averages. Industrials (XLI) saw a 20-day upturn and a 1.13% ratio gain, yet the longer XLI/SPY trends remain down. Those are watch items, not new leaders.

What would prove a real rotation?

The defensive case would weaken if XLV, XLP and XLF lost their positive absolute and ratio structures, or if RSP's relative stack rolled over. A genuine growth handover would require QQQ, XLK and SOXX to hold above their short and intermediate ratio averages — not merely outperform for one week.

The analyst is blunt on this point: "One-week outperformance is not enough." SOXX/SPY rose 6.59%, QQQ/SPY bounced 1.00% and XLK/SPY added 0.75%, yet every price-versus-average ratio cell for all three is still negative. The stated test: QQQ reclaiming its 200-day near 682, then its 20-day near 695, with ratio cells turning up. QQQ still trades below 682.2.

Divergence tells the story

The largest ratio gains came from the damaged groups — SOXX/SPY, XLE/SPY and XLC/SPY — while several established leaders slightly lagged SPY (XLV, XLP, RSP, XLY, XLRE). The review calls that a catch-up bounce, not a leadership change.

Small caps lagged the move entirely: IWM/SPY and RUT/SPY each fell about 1.2%.

The macro backdrop deteriorated alongside the rally. Gold, long bonds (TLT) and the euro all weakened against SPY and remain negative across their absolute stacks.

What to watch next

• Core leadership: XLV, XLP, XLF and RSP over cap-weighted growth.
• Repair tests: XLE reclaiming its 20- and 50-day averages; XLI holding its 20-day upturn; XLY completing its relative stack — its 150-day XLY/SPY trend is still down.
• Risk flag: SOXX after a 9.35% week while still below its 20-, 50- and 100-day averages.

The verdict from the analysis: the bounce lifted almost every sector, but it did not change who is leading. Until growth can hold its relative averages, the evidence still favors the intact defensive and quality trends — and one strong week in semiconductors, however large, is not yet evidence of anything more.