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

Two Sectors Are Rolling Over Inside The Leading Quadrant On The Daily RRG

by Julius de Kempenaer

The Relative Rotation Graphs, both daily and weekly, for US sectors are showing big disconnects between sectors. The image above holds the US sectors and shows daily rotations. It is immediately obvious that there is a big gap/disconnect between the right (=positive) side and the left (=negative)side of the graph. At the right-hand side of the RRG, we only find XLK and XLI inside the leading quadrant and XLRE already well inside the weakening quadrant. ALL other sectors are left to the center of the graph at a JdK RS-Ratio level less than 100 Read More 

RRG Charts

Watch Out For More Weakness In Financials This Week!

by Julius de Kempenaer

On the daily Relative Rotation Graph for US sectors, the rotation of Financials stands out. The tail is relatively long, indicating that there is good momentum behind this move, The bad news is that the rotation is taking place inside the weakening quadrant and has almost reached the lagging quadrant. Based on the position and the length of the tail on the Relative Rotation Graph a crossover into the lagging quadrant seems only a matter of days. When this happens, XLF will be inside the lagging quadrant on both the weekly and the daily Read More 

RRG Charts

The Staples Sector Is Improving, But Which Stocks Deserve Attention?

by Julius de Kempenaer

The Relative Rotation Graph shows the rotation of the stocks in the Consumer Staples sector against XLP, the Consumer Staples sector index. Keen observers may notice that I have left out COTY and CAG because they are very disconnected and distorting the picture. If you click on the image and open up the live version of this chart they will be there! In this article, I want to take a look at the internals of the Staples sector as XLP has started to rotate towards the leading quadrant on the daily RRG for US sectors while inside the weakening quadrant on the weekly RRG Read More 

RRG Charts

Breaking Down The Bloomberg Commodity Index Family On RRG

by Julius de Kempenaer

In this article, we are going to take a look at commodities using Relative Rotation Graphs and the Bloomberg commodity index family. When possible, I prefer to use data-sets that come from the same family and creating a "closed universe." This is a universe where all securities on the RRG together make up the benchmark that is used for comparison. For the US sectors, we often use the 11 SPDR ETFs and compare them against SPY. All these ETFs together make up SPY. For commodities, we can achieve a similar setup by using the Bloomberg commodity index family Read More 

RRG Charts

Defensive Sectors Starting Positive Rotations Again On Daily Relative Rotation Graphs

by Julius de Kempenaer

The Relative Rotation Graph for US sectors is showing a split picture. On the right, we have Utilities, Real-Estate, Consumer Staples and Healthcare. With the exception of Real-Estate maybe, these are generally accepted as "defensive" sectors. All other sectors (7) are positioned to the left of the benchmark (SPY). Not only is this universe split in terms of Jdk RS-Ratio level, but it is also split in terms of RRG-Heading. All sectors at the right-hand side of the graph are heading lower, primarily on the Jdk RS-Momentum axis and less so in terms of RS-Ratio Read More 

RRG Charts

SPY Arrived In "Trouble Territory"

by Julius de Kempenaer

After the sharp sell-off in Q4 of last year, the market (SPY) started to recover from its lows near 235. And IMHO it is still a "recovery" before turning down again as opposed to a "turnaround" back up. This weekly chart above clearly shows that the rhythm of lower highs followed by lower lows is still in play and for a turnaround to become a possibility we need, at the minimum a first higher low, i.e., above 235 or a new high, i.e., above 280, to be put into place.  Either possibility will take both time and strength. For the time Read More 

RRG Charts

Relative Rotation Graphs And Factor ETFs

by Julius de Kempenaer

It's Friday morning in Amsterdam and I just dropped my daughter off at school. On the way to my office, I usually stop at the local Coffee Company for a cappuccino and reading some, market-related, news, blogs etc. For some reason, I noticed a lot of talk and articles on factor investing, factor ETFs, factors that drive markets. Pretty much "factors" all over the place. While looking out of the window, yes it was a rainy day, I was thinking about a way to use Relative Rotation Graphs in combination with "factors". My thought was/is that "factors" Read More 

RRG Charts

If the SPY:IEF ratio is going to test its support at the 2015 peaks where do SPY and IEF prices need to go?

by Julius de Kempenaer

The above chart shows the stocks/bonds ratio using monthly bars since 2004. IMHO this is one of the most useful charts to decide on an important portion of the asset allocation in your portfolio. Should you invest in stocks or in bonds. In other words, "Risk ON" or "Risk OFF". It is a basic relative strength chart but now using bars instead of a line chart. this is to show that during a month the relative strength (ratio) can move wildly. A bar chart will give a better, more detailed, view of how, trends in, RS moved when using long-term (monthly) charts like this. A Read More 

RRG Charts

Relative Rotation Graph Shows BOB (EXC & WELL) vs WOW (NBL & FTV) Stocks

by Julius de Kempenaer

In my previous post, I highlighted both the Real-Estate and the Utilities sectors as (strong) outperformers during this weak period for stocks in general. This "Double + for Utilities and Real Estate on Relative Rotation Graph" pointed to the position inside the leading quadrant for both sectors on both the weekly AND the daily time frames. Frequent readers of this blog or people who have heard me speak at some event probably already know that I think that most investors are too focussed on "what to buy" as opposed to being aware of "what NOT to buy". Read More 

RRG Charts

Double + For Utilities And Real Estate On Relative Rotation Graph

by Julius de Kempenaer

The market keeps throwing us curve balls on a daily basis. The Relative Rotation Graph above translates these curve balls into (sector-) rotational patterns. The weekly chart above shows continuing strength for Utilities and Real Estate as they continue to move higher on both axes of the RRG. Staples and Healthcare are still comfortable inside the boundaries of the leading quadrant but lost a bit of their relative momentum which causes them to move more or less flat for now. There is nothing wrong with flat and higher on the JdK RS-Ratio scale! It means that the Read More 

RRG Charts

RRG Says Stocks Are The Weakest Asset Class

by Julius de Kempenaer

The Relative Rotation Graphs shows the rotation of various asset classes around a balance benchmark portfolio (VBINX). The message could not be more clear. Stocks (SPY) just crossed over from weakening into the lagging quadrant while ALL other asset classes are inside the leading quadrant. This is a pretty clear message that is hard to ignore. Summary Stocks rotate into lagging quadrant while all other asset classes are in leading Four red flags for SPY Read More 

RRG Charts

Plotting breadth indicators on Relative Rotation Graphs - Part II

by Julius de Kempenaer

After finishing the previous article on plotting breadth indicators on Relative Rotation Graphs I have spent hours and hours on studying probably a couple of thousand different RRGs holding various groups of sectors in combination with their breadth equivalents. And although I did not find the perfect prediction tool or the ideal leading indicator I do think using these alternative data series on RRGs can function as a piece of the puzzle that we are trying to solve. What have I learned so far? For this experiment I worked Read More 

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