Slopegraphs compare changes usually over time for a list of nouns located on an ordinal or interval scale. Slopegraphs were first introduced by Edward Tufte in The Visual Display of Quantitative Information, in 1983. He called them Table Graphics. A slopegraph is a lot like a line graph, in that it plots change between points. However a slopegraph plots the change between only two points, without any kind of regard for the points in between. It is based on the idea that humans are fairly good at interpreting changes in direction. Decreases and quickly rising increases are easily detected.
I use slopegraphs to display stock market technical analysis indicators. It serves to organize indicators for viewing in several directions. When read vertically, the chart ranks the relative metric value across the group of stocks displayed. Across the columns, the paired comparisons show how the indicator changed over the time period. The slopes of each line further compares the relative change of each stock. The lines are additionally colored to amplify positive or negative slopes.
The sample below plots momentum expressed as the Relative Strength Index (RSI) for two ETFs XLB and XLE.
On the left side of the chart observe XLB’s momentum was higher that that of XLE ten days ago.
On the right-hand side of the chart observe XLE’s momentum is higher than that of XLB today.
From the line slope and color observe if each increased or decreased over the time period.
The graph also has two demarcation constants: 70 for overbought and 40 for oversold. XLE moved from oversold to overbought during the time period. XLB moved from neutral to oversold during the time period.
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