Chart of the Day - Wednesday, February 24th, 2021

Today’s Chart of the Day was shared on Twitter by Ed Clissold of Ned Davis Research (@edclissold). The chart shows two Growth/Value ratios - Large-Cap Growth/Value (top) and Small-Cap Growth/Value (bottom). Yesterday, we highlighted the sharp rotation out of Growth and into Value that we've seen this week. Ed points out that these Growth/Value ratios are testing a well-defined support level. Growth has trounced Value for the majority of the past decade, but that trend is at a make-or-break moment. We've seen these ratios test support three times in the past six months. Each time, it sparks speculation over a potential long-term trend change in favor of Value, but that has yet to come to fruition. If these ratios finally breakdown at this key support level, we could see a much more dramatic and sustained shift towards Value. For more on this, check out the full thread here.