Don't Ignore This Chart!

RRG Shows Bullish Sector Rotation!


Weekly RRG - US sectors

As it turns out, finding an interesting chart for today's DITC article was not very difficult!

The weekly RRG, printed above, shows a very strong rotation in favor of offensive, high BETA sectors. Industrials, Financials, and Technology are already inside the leading quadrant and showing strong RRG headings. Technology even rotated back into leading from weakening which is a strong move.

The only high BETA sectors missing are Energy and Discretionary. Energy is definitely at a strong rotational path in terms of JdK RS-Momentum, but is still far away from crossing into leading. In terms of JdK RS-Ratio, this is still the weakest sector, so caution is needed. The real outlier here is Discretionary, which is inside the lagging quadrant and losing strength on both scales.

Where these high BETA sectors are showing strong rotation, their low BETA counterparts are showing almost the exact opposite rotational path. Utilities, Staples and Real-Estate have rapidly lost relative momentum and are now getting close to a crossover into the lagging quadrant.

This scissor like move definitely supports a strong outlook for the S&P 500.

-- Julius

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Julius de Kempenaer

Senior Technical Analyst,

Creator, Relative Rotation Graphs

Founder, RRG Research

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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 of 2011 and was released on in July of 2014. After graduating from the Dutch Royal Military Academy, Julius served in the Dutch Air Force in multiple officer ranks. He retired from the military as a captain in 1990 to enter the financial industry as a portfolio manager for Equity & Law (now part of AXA Investment Managers). Learn More
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