RRG Charts

Commodities (DJP) on the move?

The rotational pattern of the various asset classes on a Relative Rotation Graphs is showing interesting patterns at the moment. The RRG below holds a number of ETFs that cover Equities, Government Bonds, Corporate Bonds, High Yield Bonds, Real-Estate and Commodities. The benchmark is VBINX, the Vanguard Balanced Index Fund which consists of 60% Equities and 40% Bonds.

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FCX and NEM drive Materials (XLB) sector. Next up; FMC

The Relative Rotation Graph below holds the constituents of the Materials sector (XLB) and shows the relative rotation of these stocks against XLB. FCX and NEM stand out on this chart, way out to the right, indicating that they are the two stocks with the strongest relative trends at the moment. But there are a few other stocks in this sector that are worth a further inspection.

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US sector rotation on the move, not supporting a rise in $SPX

The last RRG blog on US sector rotation dates back to late March, about six weeks ago. Since that post "Bad health (care) for XLV" some of the rotations in play continued while others were not able to maintain their expected rotational paths and moved the other way.

The Relative Rotation Graph below shows the current positions of the S&P sector ETFs vis-รก-vis the S&P 500 index (SPY) and each other.


  • XLF and XLV remain weak despite the rise of relative momentum
  • XLK crossing over into lagging quadrant
  • XLE pushing into leading quadrant at high relative momentum
  • XLU and XLP stalling inside weakening quadrant and turning up

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Strong rotation for commodities, SPY and IEF (ratio) under threat

The Relative Rotation Graph below shows the rotational picture for a number of asset classes, based on ETFs, against the Vanguard Balanced index fund on a weekly basis. For some of these asset classes, the equivalent picture on a daily basis is confirming but for others it is contrarian. Or maybe I should say, confusing.


  • Commodities confirming turnaround after long downtrend
  • Short-term pattern in VNQ suggests longer-term weakness at hand
  • SPY:IEF ratio at proving grounds

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Bottom fishing in the Energy sector..

The energy sector has been a very poor performing sector for a very long time. However, on the Relative Rotation Graph for US sectors (ETFs), XLE is now way up inside the improving quadrant and heading right towards leading. This makes it a good sector to dissect on an individual equity level to see if there are any good buying candidates available in case this sector rotation continues in its current direction.

To do this, I will work my way through the Relative Rotation Graph holding the constituents of XLE.

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Bad Health (care) for XLV

The Relative Rotation Graph for US sectors shows us the relative movement of the various sectors against the benchmark (SPY) and against each other and in this way visualizes the current sector rotation in the US equity market.

The RRG below shows the ETFs covering the major sectors of the S&P 500 index against the ETF (SPY) that tracks this benchmark.

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Something cooking in commodities?

We live in interesting times... or maybe I should say: We live in confusing times.... Because, really, markets are throwing some serious curve balls here and there. It is time to look at some asset class rotations again.

The Relative Rotation Graph shows the rotation of a number of asset classes against VBINX (Vanguard Balanced Index Fund) which is the benchmark that I use for this universe. The RRG uses weekly data which means that it is looking to detect a bit longer term trends in relative rotation, and it will take away the noise that can clutter the day-to-day movements in financial markets.

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Stock rotation inside Industrials (XLI) sector

The Industrials sector, XLI, itself is positioned near the center of the Relative Rotation Graph holding all the sector ETFs that make up the S&P 500 index. This means that XLI is moving more or less in line with the S&P 500 and that there is, at the moment, not much to gain on a sector level.

In this article, I will take a look at the individual stocks that make up the Industrials sector and see if there are any opportunities, positive or negative, on an individual equity level. 

The Relative Rotation Graph above holds the top-50 (by market cap) stocks inside XLI. Based on the relative position of the sector the positioning of the individual equities is pretty much what one would expect; fairly evenly spread out over the plot.

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