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Valuevsgrowth

$XLE: Weekly and monthly uptrendNice signal in energy names. Macro and fiscal policy are sure making the Fed's life hard. The trend in commodities, energy, value vs growth remains bullish, same as the trend in the Dollar vs the Euro. The recent drop in inflation and oil created a very low risk buy opportunity in commodities in general. I've rotated away from my growth focused portfolio in the prior week, and am long $XLE and other names in my portfolio. I suggest you do the same, very interesting time, where the easy money disappeared from markets and people will likely get schooled time and time again trying to gamble in the same garbage names as between 2020 and 2022. Stay safe out there! Best of luck, Ivan Labrie.
AMEX:XLELong
by IvanLabrie
LONG Russell 1000 Value / SHORT Russell 1000 GrowthLong Russell 1000 Value / Short Russell 1000 Growth In a market with declining corporate profits and a stagnant real disposable incomes, growth is scarce. However, with bond yields indiscriminately driving equity valuations towards records across nearly all sectors (both cyclical and non-cyclical) value is even more scarce, and becoming scarcer as multiple expansion drives US equities to all-time-highs. There are many other reasons for the return to value, including crowding within many sectors (e.g. XLP) and names (notably 'FANG'). With the US equity market beginning behaving almost like a bond, any sort of yield shock (see linked ideas) could spark a simultaneous sell-off in equities , causing a rush for the exit in a market with little margin for error. In this event, less crowded/under-owned sectors ('value') would provide a greater cushion for equity investors and help them weather the volatility. Bringing it back to textbook market theory, value should outperform growth in a rate hiking cycle. Whilst the consensus expects US rates to remain low, and possibly even be cut, any sort of upside surprise in inflation (energy prices on top of rising core pressures) or economic growth prospects (oil 'dividend', or the US avoiding a recession in 2017) will likely see the Fed press on with further rate increases following the announcement of the current hiking cycle in December 2015. The repricing of Fed funds implied probabilities for a rate increase following the June and July jobs report illustrated this perfectly. Natural resources and financials remain the two 'value' sectors in the US with abundant single name opportunities to choose from. Within Europe it is a similar story, with automotive and real estate featuring to a lesser extent. Consider a spread trade LONG Russell 1000 Value / SHORT Russell 1000 Growth (IWD/IWF) with the ratio towards the lower 2016 channel line, expecting reversion to the middle of the range before making a higher-high. For further insight and discussion please contact me via Tradingview or LinkedIn , on Twitter @James_LVDTA, and visit www.lexvandam.com to become a member of the Trading Club.
AMEX:IWDLong
by JamesHelliwell