High RS stocks outperformed low RS stocks yesterday and today. Two days certainly doesn’t make a trend, but given the overall performance of high RS stocks since the market low, it’s a good start! Below is a chart of today’s performance broken out by decile:
The top 2 deciles performed significantly better than the average stock. The real damage today was in the Energy and Materials groups. The dollar rose today and both these groups perform much better when the dollar falls. Even though the low RS stocks performed poorly today, Financials performed better than average. This is a change from what we have seen over the last couple of months. On days when the laggard stocks underperformed, Financials tended to dramatically underperform, but that was not the case today. The chart below shows performance by group and quartile so you can get a better idea about today’s performance breakdown:
