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

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Once again, strong rotation for SPY vs other asset classes on RRG

by Julius de Kempenaer

  The Relative Rotation Graph above holds six ETF that represent various asset classes. The picture gives you the big picture of what is going on at asset class level on a relative basis against VBINX which is a Vanguard balanced index fund (60% equity / 40% bonds). This one frame immediately makes crystal clear that, from a relative point of view, there is only one asset class that is outperforming the benchmark and that is equities (SPY).   Summary Watch DJP for a break above $ 25 Read More 

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RRG suggests sector rotation out of Real Estate (XLRE) into Industrials (XLI)

by Julius de Kempenaer

The Relative Rotation Graph for US sectors shows seven sectors clustered around the benchmark in the middle of the graph (SPY) and three of them further away. XLE is more or less detached from the rest of the universe while XLP and XLY are breaking away together and heading deeper into the lagging quadrant. Within the cluster of sectors closer to the center of the chart, Real Estate (XLRE) and Industrials (XLI) are showing interesting rotational patterns backed by long(er) tails.   Summary Read More 

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INTC and PFE expected to dominate relative rotation in $INDU while NKE, DIS, and TRV are lagging

by Julius de Kempenaer

Plenty of actionable rotation towards the edges of the Relative Rotation Graph above. The RRG holds the 30 members of the Dow Jones Industrials index. Scanning around the outside of the chart the following stocks draw the attention. In the weakening quadrant, MCD is at the lowest JdK RS-Momentum reading and heading lower on the JdK RS-Ratio axis, towards the lagging quadrant. Also, MSFT and UNH have just rotated into the weakening quadrant from leading. Already inside the lagging quadrant, the weakest rotations are seen for DIS, NKE, TRV, and UTX.  Close to the Read More 

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Pair trade opportunity in XLV/XLK and potentially strong (rare) rotational pattern for XLI

by Julius de Kempenaer

The Relative Rotation Graph above holds the ten sector SPDR ETFs that make up the complete S&P 500 index (SPY).  At the moment the positioning of the various sectors and their rotational patterns are relatively evenly spread over the RRG canvas except for XLE which is far away from the center of the chart inside the improving quadrant. The Utilities (XLU) sector, which I looked at more in depth in my previous blog, continues to do well and push further into the leading quadrant. And finally, Technology (XLK) and Health Care Read More 

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"Boring" Utilities moving up to main stage

by Julius de Kempenaer

Bringing up the Relative Rotation Graph that holds all members of the Utilities sector (XLU) gives the picture above. With NRG all the way up in the top-right corner of the leading quadrant and SCG in the lower left-hand corner of the lagging quadrant, the remaining stocks in the sector are getting a bit squeezed around the center of the RRG. It means that we definitely have to inspect those two stocks on the outside of the universe a bit closer and then zoom in on the stocks around the benchmark to find out what is going on there. Utilities are Read More 

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Is TECHNOLOGY now a defensive sector?

by Julius de Kempenaer

The Relative Rotation Graph above shows the US sector universe based on S&P 500 indices (ETFs). Two sectors stand out on this chart. These are Energy (XLE) inside the improving quadrant but at low levels on the JdK RS-Ratio axis, and Financials (XLF) inside the Leading quadrant which has just lost a bit of relative momentum (JdK RS-Momentum scale). Inside the lagging quadrant both Consumer sectors, -staples and -discretionary are moving lower on the RS-Ratio scale more or less in tandem and recently picked up a bit of JdK RS-Momentum. The Read More 

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PG and PFE at similar location on RRG but one of them looks much stronger

by Julius de Kempenaer

  The Relative Rotation Graph above holds the 30 stocks that make up the Dow Jones Industrials Index and compares their relative rotation to $INDU. From the first observation of this chart, a few tails/stocks catch the eye. First, there is BA in the top-right, leading, quadrant still powering further on both axes. Also inside or just entering the leading quadrant are NKE and JPM. Both seem to have a strong RRG-Heading but last week's price action does not look very supportive. I prefer a wait and see approach in such cases. Inside the Weakening quadrant Read More 

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SPY returning to leading quadrant on Relative Rotation Graph!

by Julius de Kempenaer

The above Relative Rotation Graph holds some ETFs representing various asset classes and compares the against VBINX, a balanced index fund that holds 60% equities and 40% bonds. The most striking observation is the fact that there is only one asset class on the right-hand side of the plot AND it is returning into the leading quadrant after rotating through weakening Despite all the talk about an over stretched market, a bull market on its last legs, etc. etc. the winner is .. <drum roll> SPY!   Read More 

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What's going on in Materials? (XLB)

by Julius de Kempenaer

The Relative Rotation Graph above holds the constituents of the Materials sector (XLB). The picture shows a fairly evenly distributed pattern with no real stocks standing out, maybe with the exception of MOS as it has the longest tail of all stocks on the graph while being at the lowest JdK RS-Ratio reading. In my sector analysis in the previous blog, Materials and Financials were the only two sectors inside the improving quadrant. In that article, I focussed on XLF because of its long tail. In this post, I want to take a better look Read More 

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Strong (relative) momentum based rotations among S&P 500 sectors, powerful tail for XLF

by Julius de Kempenaer

The almost vertical tails on the above Relative Rotation Graph for US sectors indicates a very clear (relative) momentum rotation, sending some sectors from North to South and vice versa. The two most obvious tails on the RRG are for XLE, far away on the left while sharply hooking upward, and XLF which has the longest tail in the universe at the moment, indicating that a strong (momentum) move/rotation is underway. Summary Vertical tails on RRG indicate strong (relative) momentum based moves XLK and XLE wide Read More 

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