Chart of the Day – Thursday, April 25, 2024

The weekly RRG shows commodities leading while equities enter the weakening quadrant and bonds continue to underperform. pic.twitter.com/B60Wk2GL0i

— Alfonso Depablos, CMT (@AlfCharts) April 25, 2024

Today’s Chart of the Day was shared by Alfonso Depablos (@AlfCharts).

• It’s a weekly Relative Rotation Graph (RRG) comparing the three primary asset classes, Stocks, Bonds, and Commodities, benchmarked to a standard 60/40 portfolio ($AOR).

• The RRG is divided into four quadrants: Leading, Weakening, Lagging, and Improving. Alfonso points out that Equities have lost momentum over the past two months, with $SPY, $QQQ, and $IWM entering the Weakening quadrant (lower right).

• Bonds ($TLT, $HYG) haven’t left the Lagging quadrant, while Commodities ($USO, $GLD, $SLV, $CPR) have entered the Leading quadrant in the upper right.

The takeaway: Commodities are gaining momentum while Equities have begun to stall. Investors with a traditional 60/40 portfolio are leaving alpha on the table without exposure to Commodities.