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RRG charts

I have read and reviewed almost everything on the sight about RRG. But I am still having trouble getting through my thick head. I understand that price still drives decision fr me but where seems to be the sweet spot that is best to pay attention to for new ideas?,187&cmd=show&disp=u

On the above chart which draws your interest the most? PSCH or IHI


  • markdmarkd ✭✭✭
    edited February 7
    Sorry, I can't get in via that link. It reports my login closed due to inactivity, which isn't true. Can you post a graphic instead?
  • Attached is the RRG file
  • markdmarkd ✭✭✭
    edited February 7
    Would it be clearer if the benchmark were XLV, or another whole sector ETF, instead of $SPX?

    It seems you've decided you want something in Health Care, so wouldn't the broadest measure of that sector be the benchmark? I think you would want to see if you should take the whole sector or an industry within that sector - devices, providers, services.

    I don't quite get RRG either - too used to charts, I guess.

    I'm not sure I like either of the charts you've selected because they show some pretty tall volume bars on down days. --But -- I haven't decided whether technical analysis - at least the volume side of technical analysis - really applies to ETFs - since the price is really not derived from supply and demand for the ETF but the value of the underlying stocks.
  • Hi @migjdm you may want to have a look at the reply I just posted in another thread here on SCAN.
    Hope that clarifies at least a bit. Just hit me up if still confused, maybe best in the DISQUS threads below blog posts as I have noticed it is hard to keep up with all that goes on on SCAN and I have still to find a way to get noticed when something RRG related gets posted here. Happy to reply or explain here as well (when I see it that is ;) )
  • DISQUS threads??
  • Below every blog post you have an opportunity to leave a comment in DISQUS, I am trying to keep up with those and answer them before the discussion is closed ( 7 days after the blog is posted I believe)
  • Julius_RRG - What does the tail length and width tell us?
  • Hi migjdm

    The tail(s) of the various securities on a Relative Rotation Graph get thicker as they move further away from the benchmark (center of the chart) and get thinner as they close in. The rationale behind this is the fact that the further away from the benchmark, the stronger the (relative) trend is and therefore the most potential alpha to be captured.

    See the ChartSchool article here

    The trail length can be used as an indication of the power behind a move. A long trail indicates a strong move while a short trail suggests less power. We are currently researching the behavior of trails during turns and it looks as if the odds for a trail turning are higher when a trail is short (ie the intervals between observations are short) while a long(er) trail seems to suggest a continuation in the same direction

    If you use this site-search on you will find all blog posts where I talk about trail length, some of these will also have some further explanation.

    Hope this helps,

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