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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 7/27/10.

The 10-day moving average of this indicator is 60% and the one-day reading is 84%.  The diffusion index continues to shoot higher as HighRS stocks and sectors cling to gains earned in the July rally.  Dips in the High RS Diffusion Index have often provided good opportunities to add to relative strength strategies.