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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 10/4/2010:

There were no major changes this week in the RS Spread.  The top quartile and the bottom quartile of relative strength stocks continue to generate similar performance–as they have for over a year now.  A long-term view of the relative strength spread reveals the strong upward bias of the spread over time.

The RS Spread has seen other transitions from declining spreads to flat spreads to rising spreads (notably following the 2000-2002 bear market).