Growth stocks have out-performed value stocks for nearly 15 years, with a major surge from 2017 to 2020.
But the past two years have seen this turn into more of a tug-o-war as value stocks attempt to regain long-lost favor.
Is a reversal of fortune underway?
It appears that way. Growth stocks leadership is waning and today’s chart highlights this. Below is a “monthly” performance ratio chart of the Growth Stocks ETF (VUG) versus the Value Stocks ETF (VTV). As you can see, the ratio double topped at (1) while breaking short-term trend support.
Yikes! And it is now testing support at (2). If this support fails to hold, it will suggest that a change of leadership is underway. Time for value stocks to shine?
The 15-year trend of higher lows and higher highs remains in place! If it breaks support at (2) and it then breaks below last year’s lows, odds increase this long-established trend will experience an intermediate trend change.