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Relative Strength Spread

The chart below is 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 3/15/2010:

The RS Spread has spent the last couple of months going sideways, after the sharp decline in the spring of 2009.  Given the historical tendency for relative strength to move in and out of favor (with the periods when it is in favor more than compensating for the periods when out of favor), it is likely that this transition will lead us into a much more favorable environment for relative strength investing.