A longer term RS Spread is shown below.
The RS Spread has risen (in fits and starts) over time as the high relative strength stocks have handily outperformed the relative strength laggards. The RS Spread has been relatively flat for the last year or so, after declining sharply in the first half of 2009. Can you identify other periods where the RS Spread had similar action to what we have seen over the last couple of years? What followed those periods? Perhaps, that will help provide insight into our optimism for relative strength strategies in the coming years.