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 9/10/2012:
This chart is a good representation of how it has felt to invest in relative strength strategies over the past couple of years—back and forth, back and forth. Not a terribly bad environment for relative strength, but not terribly good either. Eventually, I expect that we will enter a market with more durable trends favoring relative strength strategies.