The chart below is the spread between the relative strength leaders and relative strength laggards (universe of mid and large cap stocks). When the chart is rising, relative strength leaders are performing better than relative strength laggards. As of 6/21/2010:
What is likely to follow this transitionary phase of the RS Spread over the past year? I suspect that we are setting the stage for a very favorable environment for relative strength investing in the coming years.
Let’s hope so for “Systematic Relative Strengh” investing!