The S&P 500 held support above $4,250 after indicators reached extreme oversold levels, similar to what occurred in March 2020. Short-term buyers are responding to the recent discount in share prices, which means growth stocks are due for a bounce relative to value stocks. Over the past week, technology and biotech stocks declined to lower support levels, while energy approached overbought territory.
Our tactical portfolios, which follow short-term momentum signals, are starting to rotate back into growth stocks. Further, historical data point to a recovery period for stocks over the next three months.
S&P 500 (SPY) Historical Average Returns, 20 years
Source: Cannon Advisors, StockCharts data