Market Rotation and Cap weighted epidemiology: detailed appearance | RRG chart

It is too early to write an ordinary “best five” article as it is sold every time the market is finished today. The risk of ranking changes is too high. The update will be posted on Monday before the market opens.

Instead, I examined the current strength of the product based on the RRG video analysis this week and looked at growth, value and size rotation.

You can watch the video here.

https://www.youtube.com/watch?v=luho7hjleji

Rotary signal product is a product that returns to life!

Synopsis of that analysis? Large growth stocks are once again preferred in the market. This emphasizes what is happening. When pressure is applied to the market, investors generally flock to large stocks. They are familiar and less dangerous.

Cap weighted to the same weight division

Let’s dive deeper in comparison with equal weighted partners. The above two RRGs show this relationship. At first glance, most tails move in a similar direction, but not necessarily in the same area or quadrant. However, the two sectors are noticed in terms of staple and financial in various aspects.

The same weight staple (RSP) has a short and south -facing tail inside an improvement four -section. On the other hand, XLP (Cap weighted staple) is in a delayed quadrant but is picking up steam. In the case of finance, RSPF (equal weight) is weakened with voice titles, and XLF (cap weighted) returns to the preceding quadrant.

RRG’s cap weighted equality weight division

In order to simplify this analysis, we created an RRG that compares the cap weight directly with the equivalent weighted ETF. Because of this, the trend is crucial. Cap weighted divisions (dominated by large caps) are mostly moving or improving with positive titles on the left side of the graph.

Since the input is already a ratio, you want to know whether the ratio has been improved or worsened, so use $ 1 as a benchmark.

exception

There are some notable exceptions to this trend.

Consumer discretion: A long tail that leads to weakness to weakening.

Communication Service: Rollover inside the main quadrant.

Technology: I just moved to weakening.

In all three sectors, the dominant position of the larger name (mega cap) is fading and the sector width is widening.

This exception is especially interesting because it represents some of the largest sectors in the market.

Big Cap vs. Little Cap

Comparison of large large large caps for RRG

Similar exercises that compare large caps and small cap sectors strengthen the overall trend. This comparison is much clearer because it is a real market CAO comparison. The first comparison above has only weight difference. All stocks in this sector are the same.

In this comparison, the components of the sector are not the same, showing the true difference between small and small stocks.

The only sector where small caps can be taken over is to see the tail of the tail and almost weak in the consumer discretion.

This is consistent with the risks we see in a wider market.

S & P 500 chart analysis

To summarize, let’s look at the spy chart. For a few days, he traveled around this level, and the market tried to violate more than 610 and failed. On Friday, I saw a large low day and closed the lines where the support line rose. This emphasizes the expectation that the S & P 500 needs time to digest within the transaction range and suggest more weaknesses.

What does that range look like? In my opinion, we probably see the upper boundary between 580 and 585 and 610 and 615. The weekly chart still shows a full rising trend, but it is clear that the side or modification price measures are required to digest profits. Last year (or for a year and a half depending on the beginning of the rally).

Big picture

In general, the total rise of the S & P 500 remains the same. But to digest the recent profits, you need a little more side or corrective prices. Large caps are generally interesting exceptions in sectors dominated by large caps.

As always in the market, it is all relative and now prefers boys with a relative power.

Have a nice weekend with #stayalert. Julius