The Trader Harbor
  • Business
  • Politics
  • World News
  • Stocks
  • Business
  • Politics
  • World News
  • Stocks

The Trader Harbor

Stocks

Stay Away from Large-Cap Value Stocks

by admin December 7, 2024
December 7, 2024
Stay Away from Large-Cap Value Stocks

Growth vs. Value Rotation: The Pendulum Swings Again

Relative Rotation Graphs (RRG) are not just good tools to use in analyzing sector rotation; they’re also a valuable means for visualizing other market dynamics. The relationships between growth and value stocks, or large-cap vs. mid- and small-cap stocks and the combination of these two breakdowns of the market, are prime examples.

The pure growth-value rotation, as shown in the RRG above, tells an interesting story.

Value had its moment in the sun from August to early October, but the tides have turned since then. Around the week ending Sept 27, the value tail started to roll over while still inside the improving quadrant, while the growth tail did the opposite inside the weakening quadrant. Essentially, these signaled the end of a temporary countertrend move.

Now, it’s clear that growth is once again beating value.

Size Matters: Small- and Mid-Caps Take Center Stage

When we add the RRG showing rotations of large, mid, and small-cap stocks, the picture becomes even clearer. Small and mid-cap stocks are still gaining relative strength in the leading quadrant. Meanwhile, large caps are languishing in the lagging quadrant, continuing to lose ground.

A More Granular Look: Where the Action Is

Now, let’s get into the nitty-gritty. We get a more nuanced view by combining the breakdown of the US stock universe into growth and value with large-, mid-, and small-caps. The resulting RRG with six tails, three for growth and three for value broken down into three size segments, paints a vivid picture:

Mid- and small-cap growth stocks are the clear leaders, deep in the leading quadrant and heading further into it. Value small-cap and mid-cap stocks on the right side of the graph are holding their own, although they are losing some relative momentum. Both the large-cap tails inside the lagging quadrant show this segment’s current weakness.

Still, large-cap growth has just started to curl back up a bit while large cap value continues to head southwest. This means that large-cap value is now the weakest segment in the market, being inside the lagging quadrant and traveling on a negative RRG-Heading.

What This Means for Investors

Large-caps in general, particularly large-cap value, is best avoided for now. Small-cap and mid-cap growth stocks deserve your attention — they’re where the action is.

Market Outlook: Steady as She Goes

Despite these rotations, the overall outlook for the stock market in the coming weeks remains healthy.

The S&P 500 chart shows the rhythm of higher and lower lows is intact. Divergences causing concern have been negated, and breadth metrics have normalized—they’re no longer sending too many negative signals.

#StayAlert and have a great weekend. –Julius

0
FacebookTwitterGoogle +Pinterest
previous post
Fintech is Leading and Providing a Good Hunting Ground for Bullish Stock Setups
next post
Double Top on Industrials (XLI)

Related Posts

Is the S&P 500 Flashing a Bearish Divergence?

June 11, 2025

S&P 500 Slide Explained: What Past Price Action...

May 24, 2025

Double Top Forming in Growth vs. Value?

April 6, 2024

Failed Bearish Patterns are Bullish for S&P 500!

May 31, 2024

Stock Market Volatility: Pain Points, Bright Spots, and...

April 11, 2025

Be ALERT for Warning Signs – S&P 500...

November 23, 2024

AI Stocks Ignite Again—Where Smart Money is Heading...

June 24, 2025

Surprise! These Grocery Stocks are Crushing 2024 Targets

May 25, 2024

Week Ahead: NIFTY May Continue Finding Resistance At...

April 7, 2024

DP Trading Room: Upside Initiation Climax (Should We...

June 4, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • The Real Drivers of This Market: AI, Semis & Robotics

      July 21, 2025
    • What Musk’s fracture with Trump means for GOP’s future: ‘Beating heart of the Republican Party’

      July 21, 2025
    • Trump’s housing chief rips Powell for blowing millions on Fed facelift during housing crisis he perpetuates

      July 21, 2025
    • Trump celebrates 6 months back in office: US ‘totally revived’ after being ‘DEAD’ under Biden

      July 21, 2025
    • Biden admin spent hefty sum of US tax dollars to upgrade embassy swimming pools in Iraq, Russia

      July 21, 2025
    • Trump heads to Scotland, continues ironing out trade deals after notching six months back in office

      July 21, 2025

    Categories

    • Business (1,299)
    • Politics (4,040)
    • Stocks (1,535)
    • Uncategorized (45)
    • World News (1,292)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: TheTraderHarbor, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thetraderharbor.com | All Rights Reserved