The table below shows the performance of a universe of mid and large cap domestic equities, broken down by relative strength decile and quartile and then compared to the universe return. Those at the top of the ranks are those stocks which have the best intermediate-term relative strength. Relative strength strategies buy securities that have strong intermediate-term relative strength and hold them as long as they remain strong.
Last week’s performance (9/28/09 - 10/2/09) is as follows:
The laggard rally that has been in place since the March 9th lows has resulted in those stocks with the best intermediate-term relative strength performing worse than those stocks with the worst intermediate-term relative strength. Last week was a break in that trend - not by a wide margin - but a break nonetheless. Relative strength investing moves in and out of favor like all winning investment strategies. After an extended period of being out of favor, we are watching closely for the tide to turn.
