Zoom stock provides a unique insight into the economic recovery.

With news of a vaccine on the short-term horizon, the stock market jumped on November 9.

That rally could be the beginning of a new upward move in the bull market. Or, it could be the blow off top we’ve seen at the end of many bull markets.

We will need to analyze that question using momentum and other technical indicators. We know that Zoom has been an important stock to watch as an indicator of the work-from-home trend.

More than that, Zoom stock is an indicator of how the virus affected the economy.

Every month, I’ve updated you on a unique tool for measuring this trend. (You can read my updates from early November, September and August if you missed them.)

ZM-to-BXP Ratio: Zoom Stock Provides Insight Into U.S. Economy

As Zoom became popular, offices became less popular. Stocks of companies associated with leasing office space declined. Boston Properties Inc. (NYSE: BXP) is the largest publicly traded developer and owner of Class A office properties in the United States.

Shares of BXP dropped more than 50% from their February high as office workers stayed at home.

Comparing the performance of ZM and BXP provides insight into the economy. The chart below shows the ratio:

ZM-to-BXP Ratio 

Zoom stock ratio

Source: Optuma.

When the relative strength line is rising, Zoom conferences are more popular than office spaces. This boosts Zoom stock higher. A reversal in this ratio signals a return to normalcy.

The stock market’s recent action broke the uptrend. Importantly, BXP gained more than 33% in the two weeks after the initial news of a vaccine.

This shows that investors are confident that workers will soon return to offices. Soon is a relative term, but the vaccine marks an important turning point in the war against COVID-19 and in the economy’s ability to recover.

This ratio isn’t a buy signal for the stock market. It is simply an indicator that the economy will establish a new level of normal in the next few months.

Michael Carr is a Chartered Market Technician for Banyan Hill Publishing and the Editor of One Trade, Peak Velocity Trader and Precision Profits. He teaches technical analysis and quantitative technical analysis at the New York Institute of Finance. Mr. Carr is also the former editor of the CMT Association newsletter, Technically Speaking.

Follow him on Twitter @MichaelCarrGuru.