Head & Shoulders For Nasdaq?

JC Parets
April 3, 2021

One of the things that stood out to me this quarter was most certainly the performance of Value Stocks over their Growth counterparts.

Take a look at the difference in Q1:

One thing I've heard from a few smart friends in recent weeks, is how for the stock market as a whole to be healthier, we can't have Value stocks OR Growth stocks participating.

We need to see Value stocks AND Growth stocks appreciating together.

One chart that could suggest Growth can start to rally along with Value is this one below. There's nothing more bullish than a "Head & Shoulders Top" that actually isn't that at all.

If the Nasdaq100, and its Equally-weighted version, are above their respective necklines, the path of least resistance is higher, not lower:

This is what it will most likely take to get a lot of these messy rangebound markets to pick a direction. In this case, that direction would be up.

And what a time for Growth and Value to participate together....

This chart comes from my pal Jonathan Krinsky at Baycrest Partners. It shows the Average Seasonal Pattern for the S&P500 going back 30 years:

If there was ever a time for Growth and Value to participate together, wouldn't this be a logical place for it?

Krinsky also points out that the S&P500 hasn't seen a down April since 2012.

And may I remind you, that just because Value stocks are outperforming Growth stocks, that doesn't mean Growth and Technology, more specifically, can't appreciate in prices.

Here's a throwback to last time Value stocks were really shining. Growth did just fine. It just didn't do as well as Value.

Like I keep hearing from smart friends, both Growth & Value need to be going up for broader markets to be less messy. Not one or the other.

JC

 

Strategy Session Replay!

We had a tremendous Strategy Session Thursday night and just got the replay up yesterday morning. Check it out here if you missed it. We've also got the slide deck loaded up if you want to cruise through that.

Scope it out this weekend and let me know the most interesting thing you saw!

Important topics discussed:

  • Stocks: Industrials & Banks
  • Sector Rotation
  • International Stock Indexes
  • Gold, Silver, Oil & Natural Gas
  • Strong Dollar implications
  • Biggest risks to Stocks
  • Market Breadth Deep Dive
  • Higher Rates? Higher Copper Prices?

All this and more....

Premium Members can access the full video and download the charts here.

 

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