The US stock market is still in the heightened volatility period typically seen after midterm elections.
Over the past week, precious metals showed the greatest improvement in momentum, while equities - regardless of their value or growth skew - all saw weaker momentum, as shown in the Relative Rotation Graph (RRG) below:
The areas that have seen the largest decline in momentum and relative strength over the past few weeks have been large-cap growth. But we may be on the verge of large-cap growth retaking leadership.
The Opportunity: Relative Rotation Graph (RRG) Research
Research done by Matthew Verdouw, CMT, CHTe, found that when a security is located in the lower-left, lagging quadrant, it tends to outperform:
source: Buying outperformers is too late
The numbers further improve when the heading of the security is Northeast:
…and even further improvement when located further to the left of the quadrant:
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