(Click to Enlarge)
Source: Bespoke Investment Group
Ten years ago, if you were asked to predict which sectors would be the leaders over the next decade, would you have come up with the chart above? Unlikely. At that point, all the talk was about the “new era” economy led by Technology and Telecom. It was easy to believe that the party in those sectors would go on indefinitely. The future always has a way of surprising us.
Thankfully, relying on relative strength relieves us of the burden of trying to forecast what is going to happen. We simply keep an open mind and allow our relative strength models to allocate as the market dictates.
