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This section holds educational and informational articles and general information with regard to Relative Rotation Graphs. By its nature, these articles are less- or none- time sensitive.

Brexit is SOOO 1776!


Happy Fourth of July!

On this public holiday - for the US, anyway; not so much for me ;) - I looked up a bit more about the history of Independence Day and, while doing so, it occurred to me that even back then, the British were involved in a separation...

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An Investment Process Is All About Piecing Things Together To Get Other Or Better Insights.


In my last DITC contribution, I wrote about the Real Estate sector that is crossing over into the leading quadrant while the seasonality chart for that sector indicates that over the last 20 years XLRE closed the month of July higher 71% of the time with an average gain of 1.9%

The average gain, by the way, is calculated over all years not just the years in which Real Estate outperformed the S&P 500.

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This Sector Just Returned to the Leading RRG-Quadrant AND Shows an Outperformance 71% of the Time in July


I do not believe that there is just one single tool, strategy, method, etc. that fits all our needs as investors or traders. For me, the power of research and analysis lies in combining information from various sources and subsequently putting all that together into a market-view, strategy, system, etc.

That is why I always encourage people to NOT use RRG as a standalone tool, but to always combine it with information from other sources and embedding their use into an investment process.

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The Dollar Beats All Currencies In The G10 Except For The Japanese Yen


Relative Rotation Graphs can be used to visualize the relative movement of much more than just stocks and sectors.

In the example below, the RRG shows the relative rotation for the G10 currency universe using USD as the base currency. In this case, you will see nine currencies, all expressed in USD terms, rotating around the USD.

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(Technical) Market Analysis And Portfolio Construction Are Two Completely Different Animals In The Same Zoo.


First of all, let me say that I really appreciate any feedback and comments I get on any of my articles, either via DISQUS below each blog post, via email or in SCAN. I do read all of them and I try to answer most of them, I think my response rate is above 90%. So if I have missed yours, just ping me again.

Just being polite is one reason to answer, even if the answer is "sorry I cannot answer your question." But, more importantly, the interaction with readers is fun and sometimes thought-provoking. And, on a regular basis, these exchanges of thoughts provide ideas for future articles. When that happens, I know that there is at least one person out there that likes or is interested in that article. ;)

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Real Estate Is Getting Back In Shape!


The Relative Rotation Graph for US sectors shows the sector Real Estate (XLRE) inside the weakening quadrant but moving upward, almost vertically, on the JdK RS-Momentum scale. 

This type of rotation usually indicates that a second, or third etc. leg of a relative uptrend is about to get underway.

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Value Is Taking Over From Growth And Shows Positive Rotation On RRG


One of the Relative Rotation Graphs that I like to follow, as a way of keeping a handle on the bigger picture, is the one that shows the rotation of growth- versus value stocks.

This RRG is predefined in the dropdown box under the header "US MARKETS" and shows the rotation of the Dow Jones US Growth index against the Dow Jones US Value index. The benchmark is set as the Dow Jones US Index ($DJUS).

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Staples and Financials Head Towards the Leading Quadrant While Energy Rolls Back into Lagging


The chart above shows the relative rotation for US sectors against the benchmark S&P 500. Over the last five weeks, the tails for Consumer Staples (XLP) and Financials (XLF) started to move in a similar fashion. Both are heading towards the leading quadrant.

The Energy sector, on the other hand, rotated back into the lagging quadrant, following almost four months inside improving without being able to make it over to the right-hand side of the RRG.

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Did We Just Complete a H&S Top In $SPX?


It seems I did not have to look very far to find today's DITC entry...

The S&P 500 ($SPX) provides enough ammunition to get excited - or maybe worried is a better word - and not ignore the price action that is unfolding at the moment.

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Spotting Strength And Weakness Inside The Financial Sector (XLF)


Looking at the Relative Rotation Graph showing the sectors of the S&P 500, we can see that the tail on the Financials sector stands out, having seen a big increase since last Friday.

Over the last 12-13 weeks, Financials rotated from the lagging into weakening quadrant, then moved sharply back down to lagging and then back up to improving again. The move currently underway from the previous observation (last Friday) on the weekly RRG above is especially interesting to watch, as there is a much longer distance between the two observations than what we have seen recently.

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Is China About To Pick Up The Pace Again?


Yesterday I wrote about the relationship of US stocks against other international stock markets in my regular RRG-Blog.

The Relative Rotation Graph that I use for these analyses is one of the pre-defined groups and printed above.

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What Does It Mean When The US Starts Outperforming Other International Stock Markets?


Stock markets around the world are showing mixed pictures. Returns over the last 5 weeks vary from +4% in Australia to -10% in China.

The Relative Rotation Graph above shows the relative trends that are currently in play among the various international stock market indexes.

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Will this break in IEF be able to hold up?


Browsing some Relative Rotation Graphs, the relationship between Stocks and Bonds, once again, drew my attention.

When I shifted to their respective charts I decided that the current price action of IEF as shown in the graph above deserves our, or at least my, attention.

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Gold Pops As The Stock Market Drops


After a struggle with resistance around its previous high of 2940, the S&P 500 index failed to break and started to come down off of its highs.

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Strong Rotation For AXP on RRG vs DJ Industrials



Watching the Relative Rotation Graph for the DJ-Industrials universe, you can see a few stocks, like AAPL, BA and WBA, that stand out immediately. Despite the current setback in the market, there are still some stocks that are worth approaching from a buyer's perspective.

Inside The Leading Quadrant and At Strong Heading

One of these positive exceptions is AXP. You need to zoom in on the RRG to find it, as the area around the center of the chart is a bit crowded. 

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S&P Executes Wedge And Rotation To Defensive Sectors Accelerates


Since printing its high on 1 May, the S&P 500 has struggled to keep up and make its final push through resistance. Over the last three to four days, the bulls have capitulated, putting a reinforcement of the 2940-2950 resistance zone into place. The rising wedge formation that had been building up since March has now executed.

On the daily relative rotation graph for US sectors, the rotation to the more defensive sectors is now accelerating with Health Care, Utilities and Real Estate all inside the improving quadrant and rapidly heading towards leading at a strong RRG-Heading.

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Will JNJ Be Able To Pull The Sector Back On Its Feet?


The Healthcare sector is not in its best shape. On the Relative Rotation Graph for US sectors, XLV is deep down inside the lagging quadrant against SPY, without any signs of improvement at the moment. However, if you feel that this situation will not last forever and are gutsy enough to prepare a bit for a turnaround, you may want to look at JNJ.

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Original author: Julius de Kempenaer
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Mixed Rotations For Technology Stocks Inside The Dow - MSFT Comes Out On Top!


The Relative Rotation Graph shows the five technology stocks inside the DJ Industrials index, all of which are at the right-hand side of the RRG. This is not surprising, considering the strong rotation of the sector as a whole against the S&P 500 index.

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Party Like iI's 1999 For QCOM


On the Relative Rotation Graph for US sectors, technology is doing very well with a rotation well inside the leading quadrant and pushing further into it.

Shifting gears and moving to the RRG for the technology sector (against XLK) there is one tail that firmly stands out and that is QCOM.

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"Hooks" And One Sided Rotations On Relative Rotation Graphs


Last Thursday, 18 April, was the third Thursday of the month, my regularly scheduled guest appearance on MarketWatchers LIVE. As Tom Bowley was enjoying a well-deserved day off, it was just me and Erin on duty.

It wasn't my first time co-hosting, but every time I fill in for either Erin or Tom, it makes me realize what a great job they do every day. Since I was filling in for Tom, I'd like to make a big shout-out to him for all he does on MWL - fantastic job buddy!!! Hope you had a good long Easter weekend!!

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