As markets digest the recent crash, we'll be watching closely to understand the next leadership groups if and when we another bullish rally.

It's hard to dismiss the strength out of China - in the bull market prior and even throughout this volatility. The iShares Large-Cap China ETF $FXI is still putting in a series of higher highs and higher lows.

While there's understandably a lot of concern regarding China, many Chinese equities are still in strong uptrends.

And the longer you zoom out - this is an uptrend that may only just be getting started.

Last week, we pointed out how Consumer Staples – a classic defensive sector – had surged in response to the market selloff. That’s typical behavior during periods of volatility, and we noted that it would actually be a constructive sign if that strength didn’t hold.

Well… it didn’t.

With that behind us, the question shifts from will we bounce? to how far can this bounce go?

One sector we're watching closely for clues is Financials ($XLF). It broke down hard – and now it's coming back to retest all that broken support.

This is a crucial moment.

Historically, after sharp corrections like the one we just saw, markets tend to move sideways for months. They need time to digest the move.

If we’re going to ignore that playbook and rip straight back to all-time highs, it would be… unusual.

More likely? We’re at a logical level for sellers to step in, put a lid on this rally in financials, and drag us into that choppy, frustrating range we’ve come to expect after major market resets.

The Dow Jones Industrial Average $DIA has migrated to the top of the list in the aftermath of the recent market crash.

The Dow, like so many other key indexes, have held the retest of their 2021 highs.

This suggests a strong level of support, indicating that the worst of the correction is likely behind us. While the market often consolidates or moves sideways after such events, this appears to be a constructive bottom - one we can build on with cautious optimism.

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.