A Value Breakout or a Growth Breakout?

Dynamic Hedge blogs about correlation, relative value and quantitative analysis at http://www.dynamichedge.com

The spread between large cap value and large cap growth has been coiling for several months.  The wedge has been tightening in this relationship since correlations all went to 1 in August.  This spread measures value and growth based on the strict style classifications that Standard and Poors uses to calculate their indexes.  Which is not necessarily the same definition value investors assign when describing their methodology.

Why does this matter?  The breakout from this range should tell us more about the character of the next leg of this market.  Value driven bull conditions tend to be low volatility and have staying power.  Growth driven bull conditions tend to be more volatile and come at the end of the run.  Value destroying bear conditions tend to be relentless, whereas growth destroying bear conditions are violent and signal the crescendo of the move lower.  Several other similar indexes already given a nod to the value side.  We’ll see how this one plays out.

 

###

Follow me on Stocktwits

Follow me on Twitter

 

 

 

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. คอนโดเงินเหลือ commented on Sep 18

    … [Trackback]

    […] There you can find 67071 more Information on that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  2. w88 commented on Sep 20

    … [Trackback]

    […] Read More here to that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  3. eatverts.com commented on Sep 22

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  4. immediate edge reviews commented on Sep 23

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  5. bitcoin loophole reviews commented on Sep 23

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  6. window cleaning service commented on Oct 02

    … [Trackback]

    […] Read More here on that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  7. orangeville real estate agents commented on Oct 16

    … [Trackback]

    […] Find More Info here to that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  8. cibc online login commented on Dec 04

    … [Trackback]

    […] Read More here to that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  9. manulife bank canada commented on Jan 14

    … [Trackback]

    […] Find More Info here to that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  10. software testing solutions commented on Jan 16

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  11. Sony VPCYB2M1E manuals commented on Jan 23

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]

  12. bandar togel terpercaya commented on Jan 23

    … [Trackback]

    […] Read More Info here on that Topic: thereformedbroker.com/2012/01/18/a-value-breakout-or-a-growth-breakout/ […]