Pandemic Index: Recent Relative Strength Means We Should Start Looking At Different Industries

Ever since the worst industry groups in March and April revealed themselves, I've been tracking what I refer to as my Pandemic Index.  It's an equal-weighted index of the 10 worst performing industry groups during the pandemic's first few months.  A key resistance level for this index was established at the June 8th high and we're rapidly approaching that watermark now:

If you look from that June 8th high through the early-September high, you'll see that the Pandemic Index underperformed.  It was falling while the S&P 500 was rising.  But it's been a different story since that September high.  The Pandemic Index has become a relative leader.  The real relative strength, however, has really occurred over the past two weeks - since the late-October low.  I still want to see the Pandemic Index clear the June high, but I believe that will happen in time.  In fact, 3 of the 10 industry groups included in the Pandemic Index have already cleared their June 8th high.  I'll provide one of them below:

Dow Jones U.S. Hotels Index ($DJUSLG)

The key here for me is the relative breakout.  Hotels are now trading at an 8 month relative high and breaking out.  That's a good combination.  Finding a leader in this industry group is the next step.

I'll be discussing this group and many others in what I believe will be one of the most important webinars in EarningsBeats.com history.  It starts later today at 4:30pm ET and is for EB members only.  It's actually the first of three very important members-only webinars this week.  For more information, CLICK HERE.

Happy trading!

Tom