Growth Continues to Outperform Value

Growth Continues to Outperform Value

Posted on July 23, 2018
7/23/2018
 
Market State 1- Bullish (9 days):  Historically, Market State 1 has occurred for more trading days than any of the other 12 Market States. Most new highs are registered during Market State 1. As a result of being at or near new highs, the market tends to be a little overextended.  Therefore, Market State 1 can be subject to fast short-term corrections of about 2% to 4% that can occur at anytime.

Canterbury Volatility Index (CVI 56): The Canterbury Volatility Index declined another 4 points last week. Volatility continues to be low and decreasing.  Low/decreasing CVI is a Bullish characteristic.  Volatility at CVI 56 is nearing an extremely low level. A one-day outlier, of 1.5% or more, either up or down is likely when volatility reaches extremely low levels. A one day outlier is typically followed by normal efficient trading and continued low volatility.

Comment: The market remains in a low risk environment. Growth stocks continue to lead value. The advance/decline line is at new highs (bear markets do not start when the A/D is at a new high).


Source: AIQ

Bottom Line: Approximately, 730 companies in the Russell 3000 will report their quarterly earnings this week. Of the 730 stocks, 177 are in the S&P 500 Index; 11 of the 177 are in the Dow Jones Industrial Average. The fact that we are in Market State 1 gives us an indication that the earnings reports should be strong.
 
 
Canterbury Investment Management: Tom Hardin

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As Chief Investment Officer, Tom has more than 30 years of experience in the investment management industry and has a broad breadth of knowledge. He is known as an innovator, educator and has been revolutionary in the advancements of portfolio and risk management.

Every effort was used to provide accurate data and mathematical calculations to provide, what we believe to be, accurate results. Canterbury Investment Management, LLC, and its principal owners, make no guarantee of completeness or accuracy of data or calculations as well as conclusions of any statistical data or information contained in the simulation illustrated on this page. Past results or performance is in no way a guarantee of future results.