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Relative Rotation: Tech Is Rotating Positive, Financials, Healthcare and Real Estate Rotating Downwards

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

Relative rotation is an interesting approach to see what is hot and what is not.

Liquidity moves markets!

Follow the money. Find the profits! 

The JdK RS-Ratios can be calculated for the S&P 500 index.


So what is leading? Tech. What is weakening? Real estate. Healthcare is in the bottom left quadrant.

Screen Shot 2019-04-24 at 9.08.38 AM.png

The Python code?

 def rs_ratio(prices_df, benchmark, window=10): from numpy import mean, std for series in prices_df: rs = (prices_df[series].divide(benchmark)) * 100 rs_ratio = rs.rolling(window).mean() rel_ratio = 100 + ((rs_ratio - rs_ratio.mean()) / rs_ratio.std() + 1) prices_df[series] = rel_ratio prices_df.dropna(axis=0, how='all', inplace=True) return prices_df

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