Value vs growth Right at limits of tolerance for expanded flat C=200A with 5 waves down with pos divergence wave 5 =wave 3 so value to outperform growth for a while ..Are new highs a given ..no..
IWD trade ideas
Value/GrowthTech rally may be done ...do not think it is based on $AMD $NVDA unless they were A waves moves off the lows ... that be very sneaky but definitely relative outperformance of value short to medium term
Small cap vs mega cap is in an inverted cup and handleI don't know what the future will be, but this technical pattern is interesting:
Value/GrowthThe map to follow ..value decline outstripping growth increase looking for retrace to 4 where would look to buy energy names
Growth/Value5 waves reached with extended 5 of 5 should get pullback to wave 4 ...and favours nasdaq longs
Growth vs Value, best barometer for changing style investing ...Growth vs Value, best barometer for changing style investing ...Demark TDSS and CSD/IPO ratio ...
berkshire hathaway some useful indicators part 2berkshire hathaway some useful indicators part 2 ...
Value vs Growth based on Market Cap Size ... Value vs Growth ratio stocks based on Market Cap Size index ... will the small caps change the trend for big caps in near term?
Russell 3000 Value relative to Russell 3000 GrowthValue is currently oversold within a Long-Term uptrend relative to Growth. Would not be surprised to see the recent weakness from Value/strength from Growth abate here.
US 10 Year Yield Impact on Value vs. Growth Dynamic
Here's a monthly chart of $IWD /$IWF (black line, rhs) and the US 10yr yield (orange, lhs) going back 15 years or so. The bottom panel here is the rolling 36month (aka 3yr) correlation between these two. As you can see, the rolling correlation currently sits at 0.88. While not quite as high as a few months ago, it seems clear that yields are still very much influencing the value vs. growth dynamic in equities.
$spy $iwd vs $iwf which way will it go nextI still favor value over growth. this may be your last buying opportunity.....or not Which will it be?
Money Flow 1h Market Rotation IJS Outperformance Small Cap ValueJust My Market Rotation graph, 1 hour, including extended hours. This is graphing ETF performance divided by SPY, showing relative performance over time.
IJS - iShares S&P Small-Cap 600 Value ETF - Is really outperforming everything. Eventually this has to stop? Dividends are doing well too.
The only other asset class beating it is BTC (not graphed). BTC is the new inflation hedge and doing better than gold (also not graphed)?
ARKK is oversold because of "inflation." Let's see how far it goes.
Basically, these market conditions will persist until yields stop rising.
$spy $qqq $iwd $iwf What if we are here?If we look at value vs growth you can see some striking similarities to the tech bubble back in 2000 . It may be different this time because of stimulus, but what if it isn't?
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.
