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If there may be one chart we ought to be watching for the time being, it ought to be, IMHO< the ratio between Development and Worth shares.
The picture above exhibits this relation on a weekly chart going again 15 years. After a multi-year rising development and an nearly exponential acceleration in 2019-2020, an enormous double prime formation was accomplished in mid-April.
After the preliminary acceleration decrease, the likelihood for a restoration, probably again to the breakout stage, is changing into doable, perhaps even possible. However do not get fooled by such a transfer again up, pondering that it will likely be the continuation of the development we’ve seen up to now.
Clear-cut topping formations, reminiscent of we’re witnessing right here, do not come by fairly often so I’m taking the message very severely.
In the interim Worth is in cost, and rallies are to be seen as recoveries inside the current downtrend.
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Julius de Kempenaer
Senior Technical Analyst, StockCharts.com
Creator, Relative Rotation Graphs
Founder, RRG Research
Host of: Sector Spotlight
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Suggestions, feedback or questions are welcome at Juliusdk@stockcharts.com. I can’t promise to reply to each message, however I’ll definitely learn them and, the place moderately doable, use the suggestions and feedback or reply questions.
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RRG, Relative Rotation Graphs, JdK RS-Ratio, and JdK RS-Momentum are registered logos of RRG Analysis.
Julius de Kempenaer is the creator of Relative Rotation Graphs™. This distinctive technique to visualise relative energy inside a universe of securities was first launched on Bloomberg skilled companies terminals in January of 2011 and was launched on StockCharts.com in July of 2014.
After graduating from the Dutch Royal Army Academy, Julius served within the Dutch Air Pressure in a number of officer ranks. He retired from the army as a captain in 1990 to enter the monetary business as a portfolio supervisor for Fairness & Legislation (now a part of AXA Funding Managers).
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