To The Moon

Learnings and conclusions from this week’s charts:

• The S&P500 $S&P 500(.SPX)$ dropped -0.87% on the month in February.

• (yet the equal-weighted version gained +3.4% in Feb)

• (rotation remains a key theme)

• Value vs growth rotation has clear fundamental support.

• There are still some compelling causes for optimism.

Overall, the rally in cyclicals/value is helping offset tech-troubles (aka bullish rotation), and there is clear compelling macro-fundamental support to rotation (along with the cooling-off from tech/AI hype). We’re probably seeing a classic case of overinvestment in capex on the AI front, but it’s not all bad news…

1. Happy New Month! 

The S&P500 closed down -0.87% for February, placing it marginally up +0.5% YTD. The equal-weighted version however gained +3.4% (and is up +6.8% YTD) — meanwhile the $Invesco QQQ(QQQ)$ dropped -2.3% in Feb (down -1.1% YTD).

2. S&P500 Equal vs Cap Weighted — Rotation

as such, the equal-weighted vs cap-weighted relative performance line has surged higher after previously reaching an extreme divergence from trend. This is a classic rotation trade and it reflects both the large-cap growth/tech side of things running into issues as well as the smaller/cheaper cyclicals seeing better prospects.

For SG users only, Welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with unlimited trading on SG, HK, and US stocks, as well as ETFs.

🎉Cash Boost Account Now Supports 35,000+ Stocks & ETFs – Greater Flexibility Now

Find out more here.

Complete your first Cash Boost Account trade with a trade amount of ≥ SGD1000* to get SGD 688 stock vouchers*! The trade can be executed using any payment type available under the Cash Boost Account: Cash, CPF, SRS, or CDP.

Click to access the activity

Other helpful links:

• 💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉

• How to open a CBA. How to link your CDP account. Other FAQs on CBA. Cash Boost Account Website.