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 9/24/2012:
This spread experiences sustained rising trends when market themes persist for more than a couple months at a time. We haven’t seen much of that over the past couple of years, thus the choppy spread.
A longer-term view of this spread is shown below, reflecting the superior performance of the RS leaders over time.
Past performance is no guarantee of future returns.
