Technology is weak but the stock market is still bullish

The DOW, S&P and Nasdaq are still within their bullish trend channels drawn  from the lows of late June and late August. The S&P and Nasdaq (both composite and Nasdaq 100) also made bullish two-day turnarounds on Thursday and Friday. That’s where the entire downward move on day one is reversed (or more) on day two. The DOW is below the mid point of its previous gain. Both the S&P and Nasdaq are above theirs. This disparity between the Dow, on one hand, and the S&P and Nasdaq on the other, is a drag on the market. It’s not
firing on all cylinders.

Our Relative Strength Stock Sector Table shows the Cyclical Group much stronger than the Consumer Staples Group. This is bullish. But, the Technology Group is the weakest of all with big losses in the Biotechnology, Technology Hardware and Telecommunication Services Sectors. The only bright spot in Technology is the Semiconductor Sector, up an impressive 4% since September 1. The weakness in technology is a drag on the market.

Here’s the Relative Strength Chart of the Semiconductor Sector:semiconductorsHere’s the Relative Strength Chart of the Bio-Technology Sector:pharma

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