EquitySurge.org is a financial markets educational publication, and the publisher, Smith Systems, Ltd., is not registered as a broker-dealer or investment adviser with the U.S. Securities and Exchange Commission or with any state securities authority.
Therefore the commentaries and analysis on this site represent the opinions of the publisher and other contributors and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret these opinions as constituting investment advice.
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We use RRG® graphs to show the relative strength and momentum of a group of liquidity benchmarks versus broad-based USA stock indexes. When the liquidity benchmarks show strong relative strength and momentum they appear in the green Leading quadrant. This means liquidity conditions are favorable for establishing and holding long equity positions. As the relative momentum of the liquidity benchmarks fades, they start moving into the yellow Weakening quadrant. If relative strength also then fades, they move into the red Lagging quadrant, which means that liquidity conditions are now unfavorable for holding long equity positions, and stocks should be sold or even shorted. Finally, when momentum starts to pick up again, meaning liquidity conditions are improving, they shift back into the blue Improving quadrant.
The Relative Rotation Graphs are provided by StockCharts.com, Simply the Web’s Best Financial Charts.
The terms Relative Rotation Graph and RRG are registered trademarks of RRG Research.