RRG Charts

Big stock rotation among Dow Jones Industrials members


  • Big rotation among members of the Dow Jones Industrials Index
  • DD came to life surprisingly strong
  • CVX and UTX still expected to rotate back down again to lagging quadrant
  • WMT, CAT and IBM all moving further into the lagging quadrant confirming their relative weakness
  • UNH and AXP entering the danger zone
  • MCD and GE strong inside leading quadrant

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Watch technology (XLK) for positive sector rotation


  • Health Care (XLV) catching a cold as it is rolling over
  • Financials (XLF) at crossroads, needing to unlock one of two scenarios in coming weeks
  • Energy and Materials gaining relative momentum inside the improving quadrant, but follow-through is questionable
  • Utilities, Staples and Discretionary stable inside the leading quadrant
  • Information Technology the sector to watch for further improvement in coming weeks.


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Intel (INTC) power inside!

In my recurring cycle of blog subjects, it is time to take a look at the components of the Dow Jones Industrials index again.

Once again there is a lot to see on the Relative Rotation Graph for this universe. We have GS, JPM and DIS nose-diving into the lagging quadrant on the bottom of the chart. Opposite of that, we find INTC racing into the leading quadrant with a long tail and at very high JdK RS-Momentum levels. On the (far) left side of the chart we find three stocks moving almost vertically into or nearing the improving quadrant but these moves are suspect to me and I'll explain to get deeper into that further down in this article. And finally we find a number of stable outperformers on the right-hand side and inside the leading quadrant. Names like NKE, HD, MCD and AXP are catching my eye. 

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Bonds are taking over!

The Relative Rotation Graph below shows the trends in relative strength for a number of asset classes against the Vanguard Balanced Index Fund (VBINX). The most important message sent by this chart is the opposite move of equities (SPY) versus bonds (IEF and LQD) indicating that the Equity / Bond ratio is now clearly trending lower which suggests a preference for bonds over equities.

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Don't like SPY ? Utilities may have something to offer....

The chart of the S&P 500 index ($SPX) or its ETF equivalent (SPY) has popped up in almost every blog article on the site over the past few weeks/months and the vote has been almost unanimous : It's not looking good! From an absolute point of view that is...

When watched through an international lens the US is actually improving versus other stock markets around the world. The Relative Rotation Graph below shows the relative rotation of the sectors of the S&P 500 index ($SPX). In this article I will take a more in-depth look at the Utilities sector, including some individual stocks, as it looks to be one of the better sectors inside the S&P 500 index universe with some more out-performance up its sleeve as well as have a look at the relative position of the US market vis-a-vis the rest of the world.


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Ok, SPY is falling .... now what ?

Wow, there's a lot going on in the markets and some big shifts seem to be under way in asset class rotation as well as in (international) equity markets rotation. Relative Rotation Graphs may help you get a handle to put all this movement into (relative) perspective. Let's start with a look at the rotation of various asset classes against a balanced portfolio (VBINX, Vanguard Balanced Index Fund)

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