this is not fear… pic.twitter.com/zpg7OoUQId

— 🔴 I. Vodenitcharov CFA CMT (@iv_technicals) February 23, 2021

Today’s Chart of the Day was shared on Twitter by @iv_technicals. It’s a heat map of the S&P 500 showing today’s % change for each component (as of 1pm EST today). The flavor of the week is Rotation. Over the past two days, we’ve seen a sharp rotation out of high-flying Growth stocks and into Value stocks. This week’s price action might feel like panic, but we tend to think of rotation as a healthy part of bull markets. The reason these rotation days tend to feel so brutal is because Growth areas of the S&P 500 are much larger than Value areas of the market. Yesterday, Christian Fromhertz pointed out that Growth sectors, like Tech, represent 27% of the S&P 500. On the other hand, Value sectors, like the Energy sector, represent just 3%. If you take a second to inspect this heat map, you’ll clearly see the rotation. Most of the bright red names are large Growth/Tech names while most of the bright green names are smaller Value/Energy names. So far, this pullback might feel like a full-blown risk-off environment, but we’re not exactly seeing a sea of red. At this point, it’s really just rotation doing its thing.