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

 

 

 

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/ […]