Relative Rotation Graphs

What are Relative Rotation Graphs?

A Relative Rotation Graph (RRG) is a two-axis scatter view of relative strength, created by Julius de Kempenaer. Each symbol in a watchlist is plotted against one benchmark: the horizontal axis is the JdK RS-Ratio, a normalized measure of the symbol's relative strength trend versus the benchmark, and the vertical axis is the JdK RS-Momentum, the rate of change of that ratio. Both are scaled around 100, so every symbol lands in one of four quadrants: leading (strong and strengthening), weakening, lagging, and improving.

Because relative-strength ratios tend to oscillate around their own trend, symbols often travel clockwise through the quadrants over time, from improving into leading, then weakening, then lagging. Trails behind each point show the recent path. The rotation is a tendency, not a rule: names can stall, reverse, or cut straight across the chart. And the whole display is relative, so a symbol in the leading quadrant of a falling market is only falling less than the benchmark.

How to read a Relative Rotation Graph

An RRG compresses a whole watchlist's performance against one benchmark into a single rotating picture. Reading it comes down to position, heading, and speed.

1. 1Locate each symbol's quadrant. Right of 100 means its relative-strength trend is up (leading or weakening); left means it is down (lagging or improving). Above 100 means that trend is currently gaining momentum; below means it is losing momentum.
2. 2Read the trail. The tail shows where the symbol came from and how fast it is moving: long, straight tails indicate a persistent relative move, while short or curling tails indicate hesitation or a turn in progress.
3. 3Weight heading over location. A name in the lagging quadrant heading northeast is improving in practice, while a leading name hooking downward may be rolling over. Direction of travel usually says more than the box the dot sits in.
4. 4Check the benchmark and timeframe. Rotations on weekly data unfold over months and on daily data over weeks, and the same symbol can occupy different quadrants on each. Everything shown is relative to the chosen benchmark, not absolute performance.

How traders use it

• For rotation scans: relative-strength followers concentrate longs in symbols moving through improving into leading against the benchmark and reduce or avoid names sinking through weakening into lagging, an approach shared with sector rotation models.
• As a portfolio lens: plotting current holdings shows at a glance which positions still earn their place on relative strength and which are quietly decaying, sometimes before absolute price damage appears.
• Paired with absolute price work: because RRG position says nothing about the direction of price itself, entries and exits are usually taken from standard chart analysis, with the RRG acting as the selection filter.