Investment Research from John Rothe, CMT
How to Use Relative Rotation Graphs for Selecting the Best Sectors
Relative Rotation Graphs can provide early insight into which sectors are outperforming a particle index, which sectors are strengthening, and which may become leadership areas to focus on. Academic research has shown RRG charts can provide outperformance vs buy and hold investment strategies.
A Major, Long Term MACD Signal is Forming
The popular MACD indicator is nearing a monthly buy signal on the QQQ ETF. We take a look at the historical significance of this and what it may mean for the US stock market going forward.
Economic Headwinds Facing Investors
The stock market had a strong start to 2023, with the S&P 500 finishing January with nearly a 6% gain. However, that trend began to reverse, as investors started to weigh the impact of numerous economic changes and challenges – such as mixed inflation data, bank failures, and a continued shortage of workers.
Investors now need to pay attention to possible economic headwinds that can impact their portfolios.
White Paper: Using Volatility to Add Alpha and Control Portfolio Risk
Volatility is a well-known and widely-studied aspect of financial markets, and has been the focus of numerous academic and industry research efforts over the years. It is widely recognized that volatility can have a significant impact on investment portfolios, and as...
Value vs Growth: Is A Decade of Value Leadership Coming?
Since the November lows, the relationship between Growth and Value names has traded place. If we take a look at the relative strength comparison between S&P 500 Value and S&P 500 Growth, we can see that after the Tech Collapse in 2000-2001, Value stocks outperformed Growth stocks on a relative basis up until the Great Financial Crisis. After 2009, Value underperformed Growth — until the stock market lows in November 2022.
Is International Finally Ready to Shine?
Today international stocks currently trade at more attractive valuations than U.S. stocks after a decade of underperformance. U.S. stocks trade at a higher next 12-month price-to-earnings multiple than international stocks. In addition, U.S. stocks trade more expensive against their historical valuation range, as evidenced by the 10th to 90th percentile range of historical price-to-earnings multiples.
Is This Time Different?
While doing my daily chart review, I noticed an interesting change within the S&P 500 taking place. The S&P 500 is clearly still in a downtrend as marked by the red, downward trend line. But notice the MACD; in the past, the MACD had already formed a buy...
Stocks Trade Higher for a Second Consecutive Month
Monthly Market Summary The S&P 500 Index returned +5.6% during November, outperforming the Russell 2000 Index’s +2.2% return. Cyclical sectors outperformed during November, with Materials (+11.7%) and Industrials (+7.8%), the top two sectors. Energy (+1.3%) was...
Global Equity Update – Q4 2022
Consumers Turn to Credit Cards as Inflation Pressures Finances
This month’s charts examine the trend of increasing consumer credit usage. Figure 1 charts the amount of outstanding revolving consumer credit, and Figure 2 charts the year-over-year percentage growth of revolving credit. Revolving credit, such as a credit card,...
John Rothe CMT is the Founder and Chief Investment Officer of Riverbend Investment Management
