Two factor trends are moving in opposite directions at the same time.
Hereโs the chart:
Let's break down what the chart shows:
The top panel tracks the Russell 1000 Growth relative to the S&P 500 in red.
The bottom panel tracks the Russell 1000 Value relative to the S&P 500 in green.
The Takeaway: Two factor trends are diverging.
Growth is losing relative strength while Value is gaining it. This is not a market exiting equities. This is money rotating inside them.
Growth has lost its edge. Former relative support broke and flipped into resistance. Price is now printing lower highs and lower lows. That is a downtrend in relative performance.
Value did the opposite. Price stopped going down while Growth was rolling over. It based at the lows, then reclaimed that key level. That level now holds as support. Value is now printing higher highs and higher lows.
That is how leadership changes hands.
On an absolute basis, the Russell 1000 Growth is down -3.0% year-to-date. Russell 1000 Value is up 5.5% over the same period.
This is not defensive behavior. Money is staying in stocks. It is just changing its preference. Growth exposure is getting reduced. Value exposure is getting added.
When that happens, indexes can still look fine. They just come from different places. Mega-cap Growth does less of the work. Broader groups carry more weight.
This chart does not yet support selling risk. It argues for adjusting where risk lives.
Growth had its run.
Value is back in play.
So, are you positioned for Growth, or are you adapting to where money is going now?
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