The charts below show the spread between the relative strength leaders and relative strength laggards (universe of mid and large cap stocks). When the chart is rising, relative strength leaders are performing better than relative strength laggards. As of 1/10/2011:
Since early 1990, the battle between the leaders and the laggards has been convincingly won by the leaders, albeit with intermittent pullbacks.
(Click to Enlarge)
A closer look over the past couple years shows one of those intermittent pullbacks, which has been followed by 18+ months where the leaders and the laggards have generated similar performance.
(Click to Enlarge)Read our “Relative Strength Outlook Through 2014″ for an idea of what may come next.