Stock Market Outlook: Growth To Value Rotation Continues

The S&P 500 Index fell by 0.14% on Tuesday, but don’t let that fool you, we had bullish market breadth with advancing stocks easily eclipsing declining stocks.

The “Great Rotation” from growth to value (ignited by positive vaccine news) continued for a the second day, which explains the NASDAQ Composite’s underperformance.

The Russell 2000 Index once again showed that it is currently the strongest major equity index in the United States by closing higher by 1.87%. The Dow Jones Industrial Average also fared well with a 0.90% advance.

Despite performance numbers all over the map, all four major U.S. stock market indices continue to have strongly bullish postures.

The NASDAQ Composite and Dow Jones Industrial Average ended the day with bullish intermediate confirmation signals; though neither is considered an ideal set-up.

The Momentum factor is the worst over the last one month; the Value and Dividend Yield factors have emerged as leaders over the same time period. According to the Sector Selector, we are seeing a big rotation out of the Technology sector and into the Financials sector on an intra-week basis.

We spent a lot of time on ratio charts in this video: Value is beating Growth, Equal-Weight is beating Market Cap Weight, and Small Caps are beating Mega Caps.

Our trade application example featured selling a bear call spread on International Business Machines (IBM) due to its out-of-favor sector, its bearish Near-Term divergence, and its downtrend still intact despite a reversion-to-the-mean move from an oversold cluster area.

Get market insights, stock trading ideas, and educational instruction over at the Market Scholars website.

Stock Market Video – News, Analysis & Insights for November 11th

Twitter:  @BrandonVanZee and @Market_Scholars 

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

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