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High RS Diffusion Index

The chart below measures the percentage of high relative strength stocks that are trading above their 50-day moving average (universe of mid and large cap stocks.)  As of 8/30/11.

After reaching the deeply oversold level of 2% on August 8th, this index has snapped back in a big way.  The 10-day moving average of this index is 21% and the one-day reading is 44%.  Dips in this index have often provided good opportunities to add money to relative strength strategies.