At the above pane is the SP:SPX making new lows; I really thoght that the low was already made.
Then in red in Small Cap Growth vs Small Cap Value (IWO/IWN), in green is the S&P Growth vs S&P Value (SPYG/SPYV) and in yellow is the Consumer Discretionary vs Consumer Staples (XLY/XLP).
There are a lot more but these are the most common ratios to evaluate what kind of stocks are leading. And if you want a bull market, then growth should lead right?
Well, we are seeing the first steps to it. Look how all peaked before the S&P 500 and now are making higher lows. But remeber, first steps.
Look for stocks that are making 6mo highs and 12mo highs. These should be the ones to lead the next cycle.
I hope nobody follows this bs. Think like an institution with a big bag during a bear market, you first sell value stocks with huge volumes since its easier to sell and then when the market participants or retail decide to accumulate in growth stock like you mentioned (making higher lows with 6m ath) this is one they dump it on their heads. Check the volume in these stock in the last few month. To be clear I am not saying your theory is wrong that a local bottom is close, what I am saying is using only this divergence and buying stocks making new highs is stupid at many levels. If you really want to buy growth stocks, wait for some accumulation setups at the bottom or a 3 wave with high buying volume, otherwise you are getting trapped.
dpuleo19
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@Armandohh, read closely: "Look for stocks" NOT buy stocks, I also wrote "But remember, first steps". I'm 97% in cash.
Its ok to share your opnion but watch your language.
JRSone
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So... buy high? 🤷♂️
f4taL1ty
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Perfect job
SquishTrade
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Well done!
Solldy
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Even though I don't support such a sentiment, it would be an alarming signal for my strategy, so thank you for your work!
dpuleo19
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@Solldy, Right now we are in a downtrend so if you are short there is nothing wrong. For me this is just an indication to look for stocks and don't wait for the averages to turn.