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<p><span style="font-size: 15px; line-height: 1.5em;"><div class="KonaFilter image-container display-table float_right"><div><div class="image"></div><p></p></div></div>The number of Baby Boomers' children will be greater than the number of boomers themselves, which Citi's Tobias Levkovich sees as a bullish trend for stocks.</span></p><p><span style="font-size: 15px; line-height: 1.5em;">His basic argument is that as these Baby Boomers' kids enter the 35-39 age range - aka the age when people have bought their first home, have a few kids - they'll start saving aggressively in the stock market.</span></p><p>"The Baby Boom generation powered the 1980s and the 1990s bull market run - Generations X and Y could drive the current decades upside opportunity," according to Levkovich.<span style="font-size: 15px; line-height: 1.5em;"><br /></span></p><p>In his 17-page note to clients, Levkovich made a comprehensive, multi-faceted case for why demographic trends were favorable for stocks.</p><p><span style="font-size: 15px; line-height: 1.5em;">"Some estimates suggest that more than $40 trillion of wealth will be transferred by 2060 from aging Americans to their offspring and grandchildren, with the potential for continued consumption at a more impressive pace than is generally expected," he added. "Despite the two major equity bear markets of the past 15 years, equities still offer investors better upside potential than bonds and it seems improbable that shareholders will be sellers as indices achieve new highs, if history is any guide."</span></p><p><span style="font-size: 15px; line-height: 1.5em;">Levkovich has been vocal about this bullish demographic trend <a href="http://www.businessinsider.com/citi-raging-bull-thesis-2011-12">for almost five years</a>.</span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/container-ships-collide-suez-canal-egypt-2015-3">Watch these giant container ships collide near the Suez Canal</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="E4MDQ2dDq9xjV9qTP2lvmq2AeTRu-HAW" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

This demographic trend will be bullish for stocks for years

<p><div class="image-container float_right" style="width:480px"><div class="image"><p class="source">Shutterstock</p></div></div>The market was hit hard from all directions today. Major company reports indicated more economic weakness ahead at the same time that an imminent tapering of QE became more imminent. The ten-year bond rate took another leap higher in response to lower unemployment claims despite WalMart and Cisco joining Macy’s in forecasting lower revenues in the second half. This was enough to cause the market to plunge down through its near-term S&amp;P 500 support of 1676 on volume that, although still low, was solidly higher than the previous day. It is now likely that the market has begun a new major down leg. We cite the following factors, many which have been around for a while, that now seem to be coming to a head.</p>
<p> The 10-year rate has jumped from 1.6% to 2.8% within a relatively short period of time in response to the prospect of Fed tapering, indicating that the bond market caught on to its negative implications quickly while stocks have been slow to react until very recently. The interest rate rise has increased mortgage rates significantly and will impact consumer borrowing rates for durable goods such as autos.</p>
<p>Asset values such as stocks and real estate have become increasingly dependent on QE for growth in the absence of a self-sustaining economic recovery. With earnings growth having leveled off, the seemingly open-ended QE has been virtually the only factor holding up the market. The market similarly soared during QE1 and QE2, and corrected after they ended, only to be bailed out by QE3 and QE4, which deliberately had no definitive ending date. Now that the ending date of QE4 is no longer infinite, the market is likely to act as it did in anticipating the end of the prior QE programs.</p>
<p>Even with QE in effect with no known ending date, economic growth remained stuck at an inadequate 2% on average, and has not been picking up. Consumer spending, accounting for about 70% of GDP, has been hampered by deleveraging as well as barely growing disposable income. Reports by WalMart, Cisco, Macy’s and others indicate that forecasts for a second half pickup in growth are highly doubtful. Auto sales returned to pre-recession levels by last November, but since then have been about flat. Housing appears to have stalled since the 10-year rate started to rise. Single-family housing starts have declined over the last three months while MBA purchase applications have dropped to the lowest level of the year as the rise in home prices and mortgage rates have led to a sharp rise in prospective monthly payments.</p>
<p>The Fed’s desire to taper QE is therefore not being spurred by a stronger self-sustaining economy. From minutes of the FOMC meetings, Bernanke’s press conference and various speeches by Fed members, it seems apparent that they are concerned QE is becoming less and less effective with the passage of time and that the potential negative side effects are increasing. While the goal has been to raise asset values by enough to have the so-called wealth effect spread to the economy, it has not happened, and they are increasingly worried about how they are eventually going to pare down the Fed’s balance sheet that has soared to unheard of levels.</p>
<p>Adding to the problem is the coming clash in Washington over the Federal budget and debt ceiling, with a strong faction of the House talking about closing down the Federal government. Although it probably won’t happen, the fight will be accompanied by a lot of intense conflict, political posturing and scary headlines that investors won’t like.</p>
<p>The steep market rise since March 2009 is long in the tooth and valuations have been stretched to highs that equal every major market top since 1929 with the exception of the bubble highs in 2000 and 2007. Similar to the 2000 dot-com peak and the 2007 housing boom peak, the current market is based on the QE bubble rather than the economy.</p>
<p>  Technically, when the market broke above its previous high of 1687 on the S&amp;P 500, it stopped at 1709 and has since broken down into its previous zone, negating the validity of the breakout. Notably, average daily new highs on the most recent top were only about 400, compared to 800 on the prior peak, indicating deterioration in market action. In addition, as we mentioned above, today’s downward move broke down through a key short-term resistance point. In sum, we believe that this is the probable start of a major down leg in the market.</p>

The Trend In The Stock Market Has Turned Down

<div style="float: right; margin: 15px 0 20px 20px;"><table border="0" cellspacing="0" cellpadding="0"><tbody><tr><td colspan="2"><a href="https://static-ssl.businessinsider.com/category/chart-of-the-day"> </div><p></p></div></div></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/us-government-secret-airline-janet-2015-7">There is a secret US government airline that flies out of commercial airports </a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="5uYWc3djp_WwFcNEae4eW__Ya2XMybSQ" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

The contrarian in you has to be intrigued by this trend in the stock market

With India's economic recovery catching a faster pace, the next <keyword id="5966195" type="General" weightage="20" keywordseo="multibagger-stocks" source="Orion">multibagger stocks</keyword> might emerge from sectors like power, tourism, realty and IT sectors.<br /><br />Lately, banking, PSUs and even the stocks of brokerage firms have shown an upward trend. However, steep valuations have somewhat subdued investors' interest, said industry experts.<br /><br />Nonetheless, an accelerated economic recovery has boosted demand for sectors such as power and tourism. Consequently, stocks of companies in these sectors hold potential for giving future healthy returns.<br /><br />"IT sector has seen tremendous growth in the last two years since the lockdown as more and more companies move towards making themselves digitally equipped to tackle any such situation in the future," said Vijay Dhanotiya, Senior Research Analyst, CapitalVia Global Research.<br /><br />"We have also seen strong demand environment, sustained margins and improved cash flows which is expected to continue and hence we believe it will be one of the outperforming sectors in the market."<br /><br />Besides, he cited <keyword id="997729" type="General" weightage="20" keywordseo="power-sector-stocks" source="Orion">power sector stocks</keyword> to hold great potential.<br /><br />"Indian power sector has seen outstanding demand growth and India has become the fourth largest energy consumer in the world. Power sector has also seen growth due to the government policies as well as the demand increases.<br /><br />"Indian government has allowed 100 per cent FDI in the sector and has allowed the private players to enter the market. The sector is seen as one of the top outperforming sectors as the demand of energy is sought to increase at an unprecedented pace."<br /><br />Furthermore, MOFSL's advisory subsidiary Teji Mandi, CIO Vaibhav Agrawal said that travel and tourism sector is expected to "do well on account of the opening up of the economy and revenue consumption".<br /><br />"Even real estate as a sector is at an inflection point on account of low interest rates, tax savings on buying houses and increase in people's affinity to buy houses."<br /><br />"Furthermore, resumption of office life should help to increase demand for commercial real estate as well."<br /><br />According to Rahul Sharma, Co-Founder, Equity99, sectors such as real estate, specialty-chemicals and automobiles are guiding the next stage of rally.<br /><br />"This sector (specialty-chemicals) has sawn some correction in recent times due multi-fold rise in raw-material prices," Sharma said.<br /><br />"However, considering the increasing demand and steady increase in end products price by companies we expect the raw material price increase to not have significant impact."<br /><br />In addition, he pointed out that automobile sector has taken a huge hit by chip shortage crisis and is available at "good discount".<br /><br />"However, we think that correction in this sector is over and is ready for next stage of up-move."<br /><br />"Also there has been significant demand for EV vehicles and most companies are launching many EV models. We are bullish on this sector and expect a good move here."<br /><br />SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/nykaa-vs-itc-memes-are-hilarious-but-it-may-not-be-the-right-comparison/articleshow/87755496.cms">Nykaa vs ITC memes are hilarious but it may not be the right comparison</a><br /><br /><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/the-excitement-around-go-fashion-ipo-is-making-money-for-shareholders-of-tcns-clothing-too/articleshow/87756224.cms">The excitement around Go Fashion IPO is making money for shareholders of TCNS Clothing too</a>

Next multibagger stocks might emerge from sectors like power, tourism, realty and IT sectors

IRCTC, Infosys, InterGlobe Aviation and other trending stocks on October 29

<p><table class="image-container float_right" width="200"><tr><td><div class="image"></div><p class="source">Zoo Wuppertal/Barbarar Scheer </p></td></tr></table>For the first time this year, the S&amp;P 500 closed down for the week on Friday.</p>
<p>But the move was small. The S&amp;P fell 4 points to 1,515.</p>
<p>Meanwhile, analysts' estimates for earnings growth continue to come down.</p>
<p>"Since the end of the fourth quarter (December 31), analysts have also reduced earnings growth expectations for Q1 2013 (to -0.2% from 2.4%) and Q2 2013 (to 5.0% from 6.5%)," wrote <a href="http://www.factset.com/insight">FactSet's John Butters</a> in a note published on Friday.</p>
<p>Last week, growth expectations were -0.04 percent for Q1 and +5.1 percent for Q2.</p>
<p>When stocks are flat or increasing while earnings come down, valuations are rising in a phenomenon called multiples expansion.  In other words, stocks are getting more expensive.</p>
<p>And the stock market bears who based their theses on falling earnings are struggling to reconcile this.</p>
<p>Here's a chart from<a href="http://www.factset.com/insight"> FactSet</a> showing stocks and earnings growth expectations.</p>
<p><div class="image-container click-to-enlarge" style="width:620px"><div class="image"><a title_source="FactSet" title_caption="" class="zoomin" href="http://static2.businessinsider.com/image/512ba5d269beddcd35000002-960/screen%20shot%202013-02-22%20at%203.22.18%20pm.png"><span class="click-to-enlarge-icon" title="Click to enlarge"></span></a></div><p class="source"><a href="http://www.factset.com/insight">FactSet</a></p></div></p>
<p><br />Here's a chart from Morgan Stanley's Adam Parker, which shows how full-year earnings growth expectations have been coming down.  As you can tell from the chart title, Parker expects this downward trend to continue:</p>
<p><table class="image-container" width="200"><tr><td><div class="image"></div><p class="source">Morgan Stanley</p></td></tr></table></p>

A Frustrating Stock Market Trend Continues To Torture The Bears

<p><div class="image-container float_right" style="width:400px"><div class="image"></div><p class="source"><a href="http://www.flickr.com/photos/holstphoto/3357771335/">Ryan Holst / Flickr</a></p></div>Yesterday, <keyword id="6354298" type="ORGANIZATION" weightage="60" keywordseo="stocks">stocks</keyword> surged with the the Dow Jones transportation stocks — aka the "trannies" — leading the way with a <a href="http://www.bloomberg.com/news/2013-02-27/dow-transports-jump-most-since-july-on-u-s-economy.html">2.9 percent gain</a>. .  saw their largest one-day increase since last summer,</p>
<p>But with stocks within points of all-time highs, lots of people are <a href="http://www.businessinsider.com/stock-market-crash-2013-2">wondering</a> if a sell-off is imminent.</p>
<p>Rich Moroney, the editor of <a href="http://dowtheory.com/">Dow Theory Forecasts</a>, says the fear is not warranted.</p>
<p style="padding-left: 30px;">The Dow Industrials reached fresh five-year highs on Feb. 27, while the Dow Transports reached all-time highs on Feb. 19, <strong>so the primary trend is clearly in the bullish camp under the <keyword id="1748438" type="UNKNOWN" weightage="60" keywordseo="Dow-Theory">Dow Theory</keyword></strong>. While a move to all-time highs in the Dow Industrials and S&amp;P 500 Index could help extend the market’s run in the near term, all-time highs are not necessary to keep the Dow Theory in the bullish camp.</p>
<p>In a nutshell, the Dow Theory says that if Dow transportation stocks and Dow industrial stocks confirm each other's movements highs (or lows), a buy signal (or sell signal) has been indicated.</p>
<p>Moroney also says that stocks are not overvalued based on fundamentals. The median S&amp;P 500 stock is at 15-times expected year-ahead earnings — a 4 percent discount to the norm since 2004.</p>
<p>Moroney says he is not 100-percent all in, but does not believe we're in danger of overheating: "While a secondary correction would not be surprising, the weight of the evidence suggests it is too soon to raise cash aggressively. Our buy lists have 91.9% to 97.5% in stocks."</p>

Dow Theory Guru: The Trend In The Transport Stocks Is Clearly Bullish

<p><div class="image-container float_right" style="width:400px"><div class="image"></div><p class="source"><a href="http://www.flickr.com/photos/floridapfe/4273081589/">floridapfe / Flickr</a></p></div>Stocks closed at a new <a href="http://www.businessinsider.com/closing-bell-february-19-2013-2">post-crisis high today</a>.</p>
<p>Meanwhile, <keyword id="6357061" type="UNKNOWN" weightage="60" keywordseo="earnings">earnings</keyword> growth expectations, which are the most important drivers of stocks, continue to fall.</p>
<p>"Since the end of the fourth quarter (December 31), analysts have also reduced earnings growth expectations for Q1 2013 (to -0.04% from 2.4%) and Q2 2013 (to 5.1% from 6.5%)," wrote <a href="http://www.factset.com/insight">FactSet's John Butters</a> in a note published on Friday.</p>
<p>The current negative Q1 earnings growth expectation compares to <a href="http://www.businessinsider.com/stocks-rise-earnings-expectations-fall-11-2013-2">last week's expectation for modest growth</a>.</p>
<p>When stocks go up while earnings come down, valuations are rising in a phenomenon called multiples expansion.  In other words, stocks are getting more expensive.</p>
<p>And the stock market bears who based their theses on falling earnings are being made for fools.</p>
<p>Interestingly, today's stock market rally came in the wake of what was arguably a <a href="http://www.businessinsider.com/february-homebuilder-sentiment-2013-2">disappointing housing report</a>.</p>
<p>So, what gives?</p>
<p>Last week as he wrote about his expectation for a near-term sell-off, <a href="http://www.businessinsider.com/tom-lee-markets-may-not-correct-2013-2">JP Morgan's Tom Lee</a> suggested that resilience in the face of bad news could be a sign of changing market mentality.</p>
<p>"We see the biggest challenge to our view as the possibility that equity markets are not negatively affected by bad news and continue to strengthen through 1H," he wrote  "And this could be a result of a change in the market’s character. If investor confidence strengthens, there may be less volatility."</p>
<p>Perhaps we are witnessing a structural change in investor sentiment.</p>
<p>Anyways, here's the chart from <a href="http://www.factset.com/insight">Factset</a> showing stocks rising as quarterly earnings estimates fall:</p>
<p><div class="image-container click-to-enlarge" style="width:620px"><div class="image"><a title_source="FactSet" title_caption="" class="zoomin" href="http://static4.businessinsider.com/image/51242e0eecad045443000000-960/screen%20shot%202013-02-19%20at%208.58.58%20pm.png"><span class="click-to-enlarge-icon" title="Click to enlarge"></span></a></div><p class="source">FactSet</p></div></p>
<p><br />Here's a chart from Morgan Stanley's Adam Parker, which shows how full-year earnings growth expectations have been coming down.  As you can tell from the chart title, Parker expects this downward trend to continue:</p>
<p><table class="image-container" width="200"><tr><td><div class="image"></div><p class="source">Morgan Stanley</p></td></tr></table></p>

A Frustrating Trend In The Stock Market Continues To Make Fools Of The Bears

<p>Stock prices are going up as <keyword id="6357061" type="UNKNOWN" weightage="60" keywordseo="earnings">earnings</keyword> expectations are going down. And earnings expectations are arguably the most important drivers of stocks. </p>
<p>In technical terms, strategists will call this multiples expansion.  In other words, valuations are rising as reflected by an increasing price-earnings ratio.</p>
<p>And this divergence between stocks and earnings expectations has only gotten wider since we last wrote about it <a href="http://www.businessinsider.com/sp-500-and-earnings-expectations-2012-12">a month ago</a>,</p>
<p>"Since the end of the fourth quarter (December 31), analysts have also reduced earnings growth expectations for Q1 2013 (to 2.2% from 2.5%) and Q2 2013 (to 6.7% from 6.8%)," writes <a href="http://www.factset.com/insight">FactSet's John Butters</a>.</p>
<p>Here's a chart from FactSet showing stocks rising and earnings expectations falling.</p>
<p><div class="image-container" style="width:623px"><div class="image"></div><p class="source"><a href="http://www.factset.com/insight">FactSet</a></p></div></p>

A Frustrating Trend In The Stock Market Continues To Break The Bears' Hearts

IRCTC is high on holidays, Bosch is riding the EV excitement and Hindustan copper is hoping for an open offer

<p>After a pretty <a href="http://www.businessinsider.com/q4-earnings-season-scorecard-2014-1">ugly start</a>, earnings season has improved significantly.</p>
<p>"Of the 251 companies that have reported earnings to date for Q4 2013, 74% have reported earnings above the mean estimate and 67% have reported sales above the mean estimate," said <a href="http://www.factset.com/insight">FactSet's John Butters on Friday</a>. "<strong>The percentage of companies reporting EPS above the mean EPS estimate is above the 1-year (71%) average and the 4-year (73%) average.</strong>"</p>
<p>Analysts now expect Q4 earnings to reflect 7.9% growth, which is up sharply from 6.3% a week ago.</p>
<p>This seemingly encouraging news is also hilariously ironic.</p>
<p>You see, <a href="http://www.businessinsider.com/q4-eps-growth-estimates-drop-2013-11">for months</a>, stock prices had been rallying even as earnings estimates were being slashed. And for many, this is <a href="http://www.businessinsider.com/stock-market-returns-decomposed-2014-1">a big head-scratcher</a> as earnings are the "mother's milk" for stocks. (We've written about it <a href="http://www.businessinsider.com/sp-500-and-earnings-expectations-2012-12">here</a>, <a href="http://www.businessinsider.com/sp-500-rises-earnings-expectations-fall-2013-1">here</a>, <a href="http://www.businessinsider.com/stocks-rise-earnings-expectations-fall-19-2013-2">here</a>, <a href="http://www.businessinsider.com/stocks-rise-earnings-expectations-fall-11-2013-3">here</a>, <a href="http://www.businessinsider.com/sp500-rises-earnings-expectations-fall-2013-3">here</a>, and <a href="http://www.businessinsider.com/stocks-rise-earnings-expectations-fall-2013-6">here</a>.) </p>
<p>In recent weeks, we've finally seen stocks sell-off. But ironically, the top of the market coincided with the bottom in Q4 earnings growth expectations.</p>
<p>All of this reminds us that the stock market can appear quite irrational in the short-run.</p>
<p><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span><a href="http://www.factset.com/insight">FactSet</a></span></p></div><p></p></div></div></p>

The Most Counterintuitive Trend In The Stock Market Just Got Even More Counterintuitive

<ul><li><strong>Shares of <keyword id="6355174" type="UNKNOWN" weightage="60" keywordseo="ford">Ford</keyword> have staged an impressive rebound so far in 2021, surging 70% as it unveils its electrification plans.</strong></li><li><strong>Meanwhile, shares of <keyword id="107096" type="COMPANY" weightage="60" keywordseo="Tesla">Tesla</keyword> have moved in the opposite direction and are down 14% year-to-date.</strong></li><li><strong>Technicals suggest that the outperformance of Ford relative to Tesla could continue.</strong></li><li id="recirc"><strong><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a>.</strong></li></ul><p>A two-year trend of <a href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a> outperforming <a href="https://markets.businessinsider.com/stocks/f-stock">Ford</a> is beginning to reverse as investors focus on the <a href="https://www.businessinsider.com/ford-stock-price-boost-electric-vehicle-spending-30-billion-2025-2021-5?amp">electrification efforts</a> of the 117 year-old automaker.</p><p>Year-to-date, shares of Ford have surged 70% as of Thursday afternoon, far outpacing Tesla's year-to-date decline of 14%. Ford has clearly taken a page out of Tesla's electric playbook, as it builds up anticipation among both investors and customers for its upcoming EVs. </p><p>Ford <a href="https://markets.businessinsider.com/news/stocks/ford-stock-price-extends-2-day-rally-reveals-electric-truck-2021-5-1030456249">has jumped 14% since it unveiled its electric F-150 Lightning</a> pickup truck earlier this week. The company said it is amping up its investments in electric vehicles and will target 40% of its vehicles sold to be electric by 2030. </p><p>Ford is feeling confident about its electric F-150 truck relative to Tesla's Cybertruck, based on a research note from <a href="https://markets.businessinsider.com/stocks/jpm-stock">JPMorgan</a>. Ford's management team told the bank that its internal research showed customers "wanted a product that looked like a truck, not a science experiment," according to the note.</p><p>Ford's recent outperformance should be taken into perspective when you consider that over the past two years, shares of Tesla are up more than 1,500% while shares Ford are up only 49%. Tesla's rise <a href="https://www.cnbc.com/2020/12/14/tesla-valuation-more-than-nine-largest-carmakers-combined-why.html">had briefly made it more valuable</a> than 9 biggest automakers combined.</p><p>But technicals suggest the recent trend of Ford outperforming Tesla can continue as it gets serious with its electrification efforts. Here's the technical setup of Ford relative to Tesla.</p><p>The chart below tracks the relative performance between Ford and Tesla. As the chart declines, it signifies that Ford is underperforming Tesla, and vice versa when it is on the rise. A <a href="https://markets.businessinsider.com/news/stocks/chart-patterns-technical-analysts-used-by-buy-stocks-analysis-market-2020-5-1029263411">bullish inverted head and shoulders pattern</a> has developed in the relative ratio chart and a decisive breakout above neckline resistance has occurred. </p><div type="image" title="f vs tsla.JPG" height="742" width="1225" msid="83062386" hostid="261"></div><p>An inverse head-and-shoulders pattern is a bottoming pattern that often signals a reversal following a bearish downtrend. The pattern takes its shape from a series of three bottoms, with the second bottom being the deepest.</p><p>A neckline represents resistance and is formed by connecting the three recovery peaks associated with the three bottoms. The recent break above the horizontal neckline sets Ford up for more upside ahead relative to Tesla.</p><p>On top of that, the chart is making a series of higher highs and higher lows, which is indicative of a new uptrend forming. The bullish technical outlook for Ford relative to Tesla does not mean Tesla can't move higher from here, but it does suggest that if Tesla does reverse its year-to-date decline and move higher, Ford will in tandem move higher at a faster clip. </p><p>Ford has a a lot of ground to make up ever since Tesla eclipsed it in market value back in 2019. Ford is currently worth about $51 billion, while Tesla's market value stands at $596 billion.</p>

Ford stock is outperforming Tesla this year, and technicals suggest the trend could continue

<ul><li><strong>The reversal of a multi-year trend could have been accelerated this month as <keyword id="6371181" type="UNKNOWN" weightage="60" keywordseo="interest-rates">interest rates</keyword> spiked higher, according to a note from Leuthold Group's James Paulsen.</strong></li><li><strong>Investor fund flows have started to favor <keyword id="6354298" type="DEFINITION" weightage="60" keywordseo="Stocks">stocks</keyword> over bonds, which hasn't happened in years.</strong></li><li><strong>"When fund flows have shifted toward stocks, it has typically led to leadership from the market's 'most aggressive' sectors," Paulsen said.</strong></li><li><strong><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingesttm_medium=ingest" target="_blank" rel="noopener">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a>.</strong></li></ul><p><a href="https://markets.businessinsider.com/news/stocks/stock-market-today-treasury-yields-surge-first-time-pandemic-2021-2-1030128489">Rising interest rates sparked a volatile week</a> of trading for the <keyword id="6357440" type="DEFINITION" weightage="60" keywordseo="Stock-Market">stock market</keyword>, but it could also be accelerating the reversal of a multi-year trend that suggests more long-term upside ahead for stocks, according to Leuthold Group's James Paulsen.</p><p>As interest rates rise, bond prices fall, which often sparks current fixed income investors to question whether they own too much of the asset class and not enough stocks, Paulsen said in a note on Thursday.</p><p>And there are likely a lot of investors asking that question right now, given that over the past decade, fund flows have overwhelmingly favored bonds over stocks. Even since the start of 2019, bonds have seen cumulative fund inflows of more than $1 trillion, while stocks have seen cumulative outflows of about $600 billion. </p><p>And <a href="https://markets.businessinsider.com/news/stocks/us-stock-market-outlook-stocks-not-in-bubble-territory-fundstrat-2021-1-1029930998">according to Fundstrat's Tom Lee,</a> 94% of retail fund flows have gone into bonds rather than stocks since 2008.</p><p>But more recently, this trend has reversed, with stocks seeing an uptick in inflows at the expense of bonds.</p><p>"This newfound trend of investment flows probably has a long way to go," Paulsen said, and if so, the stock market should find strong support from the new money pouring into equities.</p><p>Sectors that have led the market higher during a sustained trend of fund flows into equities are the "most aggressive," according to Paulsen.</p><p>If cumulative fund flows into stocks turn positive, "not only could the stock market continue to surprise to the upside," but the most aggressive sectors might keep leading the market higher, Paulsen concluded. </p><div type="image" title="fundflowchart.JPG" height="832" width="722" msid="81259339" hostid="261"></div>

The 'most aggressive' areas of the stock market could be set for more gains as spiking bond yields shuffle portfolios, a Wall Street chief strategist says

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