The market got crushed today, but the real damage was in the laggard stocks. These are the stocks that had actually been driving the market higher off the bottom in March. The table shows today’s performance by Relative Strength Quartile:
The returns above are simple equal weighted returns. Large Caps did much better than mid or small caps today so our Universe return is much worse than a cap-weighted return. But no matter how you look at it, the worst performing area today were the low relative strength stocks.
Insurance stocks did particularly poorly today as did many of the other Financials. On a relative basis, Healthcare and Consumer Staples did much better than the broad market. This has been the case for the past couple of days, and has been a positive development for RS strategies.
