RRG Charts

Julius de Kempenaer
About the author: is the creator of Relative Rotation Graphs. This unique method to visualize relative strength within a universe of securities was first launched on Bloomberg professional services terminals in January 2011 and was released on StockCharts.com in July 2014. A graduate of the Dutch Royal Military Academy and former captain in the Dutch Air Force, Julius first began his career in the financial industry in 1990 as a portfolio manager. He is now the director/owner of RRG Research in Amsterdam.

Latest Posts

RRG Charts

SPY Arrived In "Trouble Territory"

by Julius de Kempenaer

After the sharp sell-off in Q4 of last year, the market (SPY) started to recover from its lows near 235. And IMHO it is still a "recovery" before turning down again as opposed to a "turnaround" back up. This weekly chart above clearly shows that the rhythm of lower highs followed by lower lows is still in play and for a turnaround to become a possibility we need, at the minimum a first higher low, i.e., above 235 or a new high, i.e., above 280, to be put into place.  Either possibility will take both time and strength. For the time Read More 

RRG Charts

Relative Rotation Graphs And Factor ETFs

by Julius de Kempenaer

It's Friday morning in Amsterdam and I just dropped my daughter off at school. On the way to my office, I usually stop at the local Coffee Company for a cappuccino and reading some, market-related, news, blogs etc. For some reason, I noticed a lot of talk and articles on factor investing, factor ETFs, factors that drive markets. Pretty much "factors" all over the place. While looking out of the window, yes it was a rainy day, I was thinking about a way to use Relative Rotation Graphs in combination with "factors". My thought was/is that "factors" Read More 

RRG Charts

If the SPY:IEF ratio is going to test its support at the 2015 peaks where do SPY and IEF prices need to go?

by Julius de Kempenaer

The above chart shows the stocks/bonds ratio using monthly bars since 2004. IMHO this is one of the most useful charts to decide on an important portion of the asset allocation in your portfolio. Should you invest in stocks or in bonds. In other words, "Risk ON" or "Risk OFF". It is a basic relative strength chart but now using bars instead of a line chart. this is to show that during a month the relative strength (ratio) can move wildly. A bar chart will give a better, more detailed, view of how, trends in, RS moved when using long-term (monthly) charts like this. A Read More 

RRG Charts

Relative Rotation Graph Shows BOB (EXC & WELL) vs WOW (NBL & FTV) Stocks

by Julius de Kempenaer

In my previous post, I highlighted both the Real-Estate and the Utilities sectors as (strong) outperformers during this weak period for stocks in general. This "Double + for Utilities and Real Estate on Relative Rotation Graph" pointed to the position inside the leading quadrant for both sectors on both the weekly AND the daily time frames. Frequent readers of this blog or people who have heard me speak at some event probably already know that I think that most investors are too focussed on "what to buy" as opposed to being aware of "what NOT to buy". Read More 

RRG Charts

Double + For Utilities And Real Estate On Relative Rotation Graph

by Julius de Kempenaer

The market keeps throwing us curve balls on a daily basis. The Relative Rotation Graph above translates these curve balls into (sector-) rotational patterns. The weekly chart above shows continuing strength for Utilities and Real Estate as they continue to move higher on both axes of the RRG. Staples and Healthcare are still comfortable inside the boundaries of the leading quadrant but lost a bit of their relative momentum which causes them to move more or less flat for now. There is nothing wrong with flat and higher on the JdK RS-Ratio scale! It means that the Read More 

RRG Charts

RRG Says Stocks Are The Weakest Asset Class

by Julius de Kempenaer

The Relative Rotation Graphs shows the rotation of various asset classes around a balance benchmark portfolio (VBINX). The message could not be more clear. Stocks (SPY) just crossed over from weakening into the lagging quadrant while ALL other asset classes are inside the leading quadrant. This is a pretty clear message that is hard to ignore. Summary Stocks rotate into lagging quadrant while all other asset classes are in leading Four red flags for SPY Read More 

RRG Charts

Plotting breadth indicators on Relative Rotation Graphs - Part II

by Julius de Kempenaer

After finishing the previous article on plotting breadth indicators on Relative Rotation Graphs I have spent hours and hours on studying probably a couple of thousand different RRGs holding various groups of sectors in combination with their breadth equivalents. And although I did not find the perfect prediction tool or the ideal leading indicator I do think using these alternative data series on RRGs can function as a piece of the puzzle that we are trying to solve. What have I learned so far? For this experiment I worked Read More 

RRG Charts

Plotting breadth indicators on Relative Rotation Graphs - Part I

by Julius de Kempenaer

In my contribution to last week's Chartwatchers newsletter, I mentioned my current experiment on using breadth indicators on a Relative Rotation Graph. In this article, I want to take a look at a few of these setups side by side and see if there is indeed a leading tendency for breadth to lead price on the RRG as it tends to do on regular charts as well. I remember sitting in on a presentation by Greg Morris at the CMTA symposium a few years ago when he was talking on breadth indicators. In that talk Greg used the quote: "Breadth arrives at a party on time Read More 

RRG Charts

Using RRG to find some good and some not so good names inside the DJ Industrials index.

by Julius de Kempenaer

The relative rotation graph above shows the rotation of the 30 DJ Industrials stocks. Watching the interaction on the canvas, a few rotations catch the eye. Inside the lagging quadrant IBM, HD, and DWDP are clearly moving deeper into negative territory. On the opposite side inside the leading quadrant, we find MCD, WBA, PG, and WMT at strong RG headings moving higher on both axes. In the weakening quadrant, the most pronounced rotations are visible for Nike and Apple. Both stocks have gone through a strong rotation and are now rapidly losing Read More 

RRG Charts

Some utility stocks worth paying attention to

by Julius de Kempenaer

The relative rotation graph above shows a selection of stocks in the utilities sector. I have created this zoomed in version for better visibility. The fully populated RRG can be found here. In this post, I will highlight a few of the stocks shown in the picture. As XLU is now one of the sectors inside the leading quadrant vs SPY and continuing higher on both axes. I will focus on a few names that are expected to fuel further relative strength in utility stocks but also point to one that is better avoided. Summary Read More 

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