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Weekly RS Recap

 The table below shows the performance of a universe of mid and large cap U.S. equities, broken down by relative strength decile and quartile and then compared to the universe return.  Those at the top of the ranks are those stocks which have the best intermediate-term relative strength.  Relative strength strategies buy securities that have strong intermediate-term relative strength and hold them as long as they remain strong.

Last week’s performance (11/16/09 – 11/20/09) is as follows:

The better performance last week was found in those stocks with the worst longer-term relative strength.  The week before saw just the opposite.  It seems that relative strength strategies experienced their worst underperformance in the several months following the March 9th lows.  However, over the last couple of months it seems that relative strength leaders and laggards have been trading shots with no one side proving decisive.  Time will tell if this is just a transitional period into a more favorable environment for relative strength strategies.