Industrials Sagging:

The industrials as seen on the chart below from the Novel Investor, have underperformed the S&P 500 for four straight years, and 8 of the last 10. Sure it put up very respectable gains of more than 20% in 2017 and 2019, but they overall have been far from leaders. Through one month of 2021, it is keeping with its recent pattern, as the XLI is lower by more than 4%, and is currently just the tenth best of 11 of the major S&P sectors. Of course the Dow “Industrial” average, now with by my count has just 5 actual industrial names within the index is doing battle with the very round 30000 number here (Nasdaq doing the same at 13000). The Dow looks like it wants to fill in a gap near 28500 from early November. The XLI CLOSED everyday this week below its 50 day SMA, and it looks similar to the 5 days finishing below the line in late October-early November last year. The ETF is going to have to make a very quick recapture of that line again, although it looks as if it will need to take more time. The group is going to need help from defense/aerospace and delivery services.

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