Relative Strength Spread

The chart below is the spread between the relative strength leaders and relative strength laggards (top quartile of stocks in our ranks divided by the bottom quartile of stocks in our ranks; universe of U.S. mid and large cap stocks).  When the chart is rising, relative strength leaders are performing better than relative strength laggards.    As of 3/20/17:

rs spread

The RS Spread has declined for most of the past 12 months as the RS laggards have performed better than the RS leaders, but that dynamic appears to be changing.  The RS Spread has now moved above its 50 day moving average, a potentially positive development for relative strength strategies.

The relative strength strategy is NOT a guarantee.  There may be times where all investments and strategies are unfavorable and depreciate in value.  Past performance is not indicative of future results.  Potential for profits is accompanied by possibility of loss.

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