The Stock Market Struggles Because Technology is Weak

The DOW, S&P and the Nasdaq Composite are all still within their short-term bullish trend channels. These short-term gains began in the end of 2012. The long-term bullish trends as seen in weekly charts began in the end of 2011. It is usually during October and November that the stock market bottoms and begins a fresh bullish rally. The stock market sank last week. The Nasdaq sank the least even though there is significant weakness there (more below). All three indexes are above the mid point of their prior gain. The Dow displayed some weakness as its most recent high was equal and not higher than the previous high. Neither the S&P or Nasdaq composite had this problem. It probably suggests more sideways action.

Our Stock-Sectors’ Relative Strength Table shows strength in the Cyclicals and Finance Groups with weakness in Consumer Staples (that’s bullish) and the Technology Group. The market performs best when both the Cyclicals and Technology Groups lead the way. A sizable gain in the Semiconductor Sector with smaller increases in Electronics and the Internet were offset by losses in Biotechnology, Technology Hardware and Telecommunications Services.

Here’s the Relative Strength Chart of the Automobile Sector:

autoHere’s the Relative Strength Chart of the Transportation Sector:transportation

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