For nearly twenty years, the market played by a simple set of rules:
Growth over value.
This trend guided portfolios and dominated positioning for more than a decade.
But now the question is rising: could that be changing?
Could we be entering a phase where money rotates back into more value-oriented areas of the market?
Less tech, and more Financials, Industrials, Materials, and even Energy?
A logical place to start watching for a potential rotation is the Russell 1000 Growth $IWF versus the Russell 1000 Value $IWD.
The ratio is struggling to reclaim the 161.8% extension and looks like it’s settling back into its previous range.
If the ratio falls below 2.21, it could signal an opportunity for value sectors to start leading, even if only temporarily.
A similar story is playing out when you look at the Nasdaq Composite versus the Dow Jones Industrial Average.
The Nasdaq is roughly 60% tech and 20% Consumer Discretionary. The Dow, on the other hand, is only 20% tech, 28% Financials, and 15% Industrials—essentially a more value-oriented index.
Right now, that ratio is hitting a brick wall at its dot-com bubble high, making this area a critical inflection point.
If there’s a place for value to reassert some leadership, this could be it.
Is this simply a near-term mean reversion, a short-term counter-trend rally… or the beginning of a major rotation into value?
