We’ve seen one crazy rotation after another in the stock market ever since the COVID-19 pandemic began in 2020. It seems the market is playing a dangerous game of hot potato, where leadership is getting passed back and forth between growth and value stocks in 2021.
We’ve seen COVID-19 stocks take the lead for weeks, only to crash… hard. Then reopening plays — which contain a ton of value names — will begin to take the lead… until they crash as well.
And then the cycle repeats itself.
So it shouldn’t come as a surprise that I’m beginning to see the pattern emerge again at the end of June 2021…
Why? Because we now have to deal with the rumblings of a new strain of COVID-19 called the Delta variant.
And it’s created another storm in growth and value stocks in 2021.
Growth and Value Stocks in 2021: Which Will Outperform the Other?
Taking a look at the charts right now, I see a lot of room for buying and shorting trade opportunities.
If you look at the best and worst sectors so far in June, you see that hotel stocks, airline stocks and copper have been getting smacked down. And these are value names that were crushing it when the economy was making a comeback as the U.S. was reopening.
Now we’re seeing semiconductors, technology and stay-at-home stocks (growth stocks) ripping higher because of the rotation — again.
During times like this, a good strategy is to compare the S&P 500 Growth and Value indexes.
And everything I see right now between the two charts is hinting at a bull market… and that can only mean one thing.
However, if you’re feeling bearish toward the stock market and bullish toward the economy, then it might be worth using this next tool to pinpoint the best trade.
Check out my short video below to learn more about growth and value stocks in 2021, and which one will take lead in the next market rotation.
Also be sure to share your thoughts in the comments section below.
And as always, send any trading questions to jeff@joyofthetrade.com and stay ahead of the markets, especially these choppy ones, by subscribing to our YouTube channel.
