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Value ETF Beats Tech ETF; Energy ETF Outdoes Both

That’s a new high this week for value.

To state it plainly and simply, what are called “value stocks” are doing better than what are called “growth stocks” lately. Not only that, but an energy exchange traded fund is doing better than either of the ETF’s representing value or growth. The tone of this market is changing – take notice.

The daily chart of the S&P Value Index looks like this:

You can see that new all time highs established this week. The Wednesday closing price, the Thursday closing price and the Friday closing price each made it above the May high of just above 1500. The value index is back above the Ichimoku cloud (a blend of moving averages) again, a generally positive sign. There’s something close to an inverse head-and-shoulders pattern across the June through September lows, as well.

Now take a look at the benchmark “growth” index, the S&P 500 Growth ETF:

Although this index rallied this week before selling off a bit on Friday, it’s failed to make a higher high than the early September peak. Compare this chart to the value stock chart above — it’s been rare for months to see value out perform growth, but here we are. Note that the RSI and MACD indicators are both diverging from price in less than positive fashion.

Now take a look at the daily price chart for the Energy Select Sector SPDR Fund:

As the pride of oil took off above $80/barrel this month, that action seems to have benefitted oil and gas stocks as well. The October highs broke above the old highs set in June. The divergences in the RSI and MACD in the July through August period foretold the coming strength.

You know what else is out performing growth right now? Here’s the daily price chart for the Financial Sector Select SPDR Fund:

That’s a new all time high for the financials. One big component, American Express

, helped out on Friday by advancing upward 5.42%. Warren Buffett and Charlie Munger keep it in the Berkshire Hathaway

fund — maybe they were adding this week. Other components added to the fun: Goldman Sachs

gained 1.63% and JP Morgan 1.43%.

The main things to watch for this week and as we approach the holiday season: 1) will the price of oil reach $100/barrel? West Texas Intermediate came within a whisker of $85/barrel this week. 2) Will the 10-Year Treasury Note yield pop above 1.78%? That’s the high yield from March — above that might indicate a greater appetite among investors for the risk-free rate of return than for other investments.

Not investment advice. Do your own research and always consult with a registered investment advisor before making any investment decisionis.

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