When investors talk about “the market” they have to broaden their view of what the market is – in other words, it is more than the 500 stocks on the S&P, Dan Russo, CMT, chief market strategist at Chaikin Analytics told Real Vision during today’s Daily Briefing.

Russo said that different trends are happening across different markets and that investors should consider what is outperforming as well as what is fading on a relative basis. In some sectors, he said, it makes sense to take it down to the industry level. For example, in the healthcare sector we’re seeing biotechnology on fire while pharma languishes.

“Relative strength is important both from an equity standpoint and a bigger picture asset allocation standpoint,” he said. “You should skew your portfolio toward what’s outperforming.”

One asset class Russo takes cues from is the ratio of copper to gold. From a macro standpoint, the fact that copper has been lagging gold is a signal of slowing global growth because copper is so widely used throughout the global economy. If global growth was strong, he argued, copper would be outperforming gold. And while that relationship has been in place for a while, COVID has accelerated the slowdown to the downside.

Overall, Russo said the macro trends he’s looking at are slower demand, lower growth, and rising inflation and that those things could be the catalysts for insolvency for highly levered companies, but as long as the S&P is above 3,000, he thinks you can be invested in equities.

The question is, which equities? Russo said to go where there is growth. He believes the market can work higher led by growth companies like Amazon and that it makes sense to fade reopening stocks like airlines, energy, and banks.