I've published this chart a few times, but the pivot from Growth to Value is accelerating at an astonishing rate. August 3rd is the date where this rotation really began. You can see big tech mega-caps start to stall at that point and we've seen several pullbacks in growth names since that time.
It was a correction that needed to happen. Once the rotation is done, there's a good chance the whole market can move back to an uptrend.
Very interesting. Thanks for the perspective. What would you say is the normalization value (as a percentage on that graph) for this ratio? Is 20-25% a good normal value? I'm sure this perspective has changed over the years...
drewby4321
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@sipiceanu, thats a great question. I'm not sure how I'd put an exact science to it, but if you draw a straight line (instead of my parabolic) from the tops of 2016, 2018 and 2019 and assume that the ratio should continue to grow along or beneath that line, then the ratio would be at or below 1.18 right now. As of today it's at 1.30. Sorry, I had the chart in % change mode when I published it.