One of the most interesting charts out there right now IMO. If this becomes a failed breakout for growth stocks relative to value, we might be sitting here 9 months from now talking about how the Financials and Industrials were the leaders in 2024. And maybe the small caps too pic.twitter.com/SMeaHKsXo1
— Austin Harrison, CFA, CMT (@meanstoatrend) March 12, 2024
🏆 Today’s Chart of the Day was shared by Austin Harrison (@meanstoatrend).
- Austin points out that growth vs. value ($IWF/$IWD) is retesting its former highs after breaking out in January. The outcome of this test will give us an idea of which sectors will outperform in the coming months.
- The top growth stocks in $IWF are $MSFT, $AAPL, $NVDA, $AMZN, and $META, while the top value stocks in $IWD are $BRKB, $JPM, $XOM, $JNJ, and $PG.
- A breakdown would imply new leadership from value-oriented sectors (Financials, Industrials, Health Care), while a bounce would imply renewed leadership from the Magnificent 7 and growth-oriented sectors (Tech, Discretionary, Communications).
The takeaway: Growth vs. Value ($IWF/$IWD) is at a key inflection point. It’s rebounding so far, suggesting renewed leadership from the Magnificent 7 and growth-oriented sectors. But, a breakdown would imply new leadership from value-oriented sectors.