Direct Answer
The RS-Momentum axis of a Relative Rotation Graph, introduced by Julius de Kempenaer. It measures the rate of change of the RS-Ratio, centred on 100, and shows whether relative strength is improving or deteriorating. A value above 100 means relative strength is improving and below 100 that it is weakening.
Relative Rotation Momentum: Formula, Meaning, Signals, Examples and How to Use It
How Is Relative Rotation Momentum Calculated?
The RS-Momentum axis of a Relative Rotation Graph, introduced by Julius de Kempenaer. It measures the rate of change of the RS-Ratio, centred on 100, and shows whether relative strength is improving or deteriorating.
Formula: Simplified form: RS-Momentum = 100 x RS-Ratio(t) / RS-Ratio(t - N); exact smoothing and normalisation differ between software
Inputs:
- RS-Ratio series for the asset against a benchmark
- Look-back length N
- Smoothing used by the charting software
Worked example. If the RS-Ratio has moved from 100.9 to 101.8 over the look-back, the simplified momentum is 100.89. The inputs are illustrative numbers, not market data.
Reading it. A value above 100 means relative strength is improving and below 100 that it is weakening. On the graph, the vertical axis places an asset in one of four quadrants together with the RS-Ratio: leading, weakening, lagging or improving.
Limits. The published JdK calculation is a specific smoothed and normalised construction, and the simplified formula here approximates the idea only. Readings depend on the benchmark and the look-back.
What is Relative Rotation Momentum?
The RS-Momentum axis of a Relative Rotation Graph, introduced by Julius de Kempenaer. It measures the rate of change of the RS-Ratio, centred on 100, and shows whether relative strength is improving or deteriorating.
How to use Relative Rotation Momentum
A value above 100 means relative strength is improving and below 100 that it is weakening. On the graph, the vertical axis places an asset in one of four quadrants together with the RS-Ratio: leading, weakening, lagging or improving. A reading alone is never a buy or sell signal; it needs context from price structure, volume, volatility and the broader market regime.
Strengths
- Centering on 100 gives a fixed neutral line, so above 100 means relative strength is improving and below 100 means it is weakening.
- Paired with the RS-Ratio it places each asset in one of four quadrants, adding a direction of travel to a plain strength reading.
- Reproducible when the formula and data convention are fixed.
Weaknesses and limitations
- As a rate of change it turns earlier than the ratio it is derived from, so brief wobbles in strength can register as full swings.
- Every asset is measured against one benchmark, so changing the benchmark moves all points on the graph and can rotate assets between quadrants.
- Correlated indicators can create false confidence by repeating the same underlying information.
Editorial and risk note
This page is educational content, not individualized investment advice. It should not imply guaranteed prediction, accuracy or outperformance.
Frequently Asked Questions
Is Relative Rotation Momentum a buy or sell signal?
No. A value above 100 means relative strength is improving and below 100 that it is weakening. The published JdK calculation is a specific smoothed and normalised construction, and the simplified formula here approximates the idea only. A trade built on it still needs a trigger, an invalidation rule, a position size and realistic execution assumptions.
What is the best setting for Relative Rotation Momentum?
Relative Rotation Momentum takes these inputs: RS-Ratio series for the asset against a benchmark; look-back length N; smoothing used by the charting software. There is no universal best setting for the tunable ones, so test them across instruments, regimes and out-of-sample periods and favor stable parameter regions over one historical winner.
Can Relative Rotation Momentum be used by itself?
The published JdK calculation is a specific smoothed and normalised construction, and the simplified formula here approximates the idea only. Readings depend on the benchmark and the look-back. For that reason it is read next to measures of direction, participation, valuation, liquidity and risk, not alone.
Does Relative Rotation Momentum work on every timeframe?
The calculation (Simplified form: RS-Momentum = 100 x RS-Ratio(t) / RS-Ratio(t - N); exact smoothing and normalisation differ between software) can be run on any bar size, but behavior is not portable: a reading on a five-minute chart describes a very different market window from the same reading on a daily chart. Validate the exact timeframe before relying on it.
Why does Relative Rotation Momentum give false signals?
As a rate of change it turns earlier than the ratio it is derived from, so brief wobbles in strength can register as full swings. Every asset is measured against one benchmark, so changing the benchmark moves all points on the graph and can rotate assets between quadrants. Lag, noise and regime changes add to this, because market participants react to new information after the reading is calculated.
How should Relative Rotation Momentum be backtested?
Rebuild Relative Rotation Momentum from RS-Ratio series for the asset against a benchmark using point-in-time data, write the rules before testing, include delisted securities where relevant, model realistic fills and costs, reserve a validation sample and compare with a simpler baseline.