Every investment choice can be assigned to one of five possible asset classes: Domestic Equities, International Equities, Fixed Income, Commodities or Cash. At the start of each Action Report period we apply a relative strength computation to rank each asset class from highest to lowest based on the price momentum of the individual investment choices in the asset class. The asset class with the highest score is considered "favored." For a detailed discussion of relative strength click here. Here's how you can think of this process in layman's terms. Consider the Olympic games team events (e.g., skating, gymnastics). Teams of athletes compete against each other and are awarded points for their team based on their individual results. The team with the most points wins the gold medal. For our purposes, our "teams" are the five asset classes, our "athletes" are the investment choices and our "event" is price performance. The asset class with the best price performance is awarded the "favored" asset class designation, i.e., the gold medal.