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

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 

RRG Charts

"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 

RRG Charts

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 

RRG Charts

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 

RRG Charts

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 

RRG Charts

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 

RRG Charts

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 

RRG Charts

AAPL rotating opposite to BA on Relative Rotation Graph for $INDU

by Julius de Kempenaer

Watching the 30 members of the Dow Jones Industrials index on a Relative Rotation Graph always provides a great insight into what's going on under the hood of that universe. The first quick takes from the graph above are a fairly evenly spread universe with no big outliers and AAPL heading into the weakening quadrant while still at the second highest JdK RS-Ratio reading. Also on the right-hand side of the RRG, we find BA moving opposite of AAPL into the leading quadrant from weakening, these are usually strong relative moves. Inside the leading quadrant Read More 

RRG Charts

Commodities completely detached from other asset classes and equities picking up over bonds again

by Julius de Kempenaer

This Relative Rotation Graph for Asset Classes shows Commodities (DJP) far away in the bottom-left corner of the chart, completely detached from the others. At, by far, the lowest readings on the JdK RS-Ratio axis, DJP moved higher on the JdK RS-Momentum axis for a few weeks but recently turned left again, diving even deeper into the lagging quadrant. The Asset Class Rotation remains characterized by still NO asset classes inside the leading quadrant at all and only one, SPY (Equities), at the right-hand side of the graph. This makes a very good visualization for Read More 

RRG Charts

Are you looking at Industrial (XLI) stocks? ..Maybe you should.

by Julius de Kempenaer

This Relative Rotation Graph holds the top 50 (based on market cap) members of the S&P 500 Industrials sector index (XLI). This sector accounts for just over 10% of the S&P 500 market cap and is the fifth largest sector in this index. At the moment it does not seem to get the attention it might be deserving. In the chart above a few stocks immediately catch the attention. Very clearly in the lagging quadrant, we see GWW shooting further down into negative territory on a 225 degree RRG-Heading. Just behind it are PCAR and FAST at similar Read More 

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