The stock market rose but all is not rosy.

All three indexes moved higher last week. But all is not rosy. The Dow and S&P 500 moved up on Friday in a small range that was not commensurate with the increase in
volume compared to Thursday (in the case of the S&P) or Wednesday (for the Dow). The Nasdaq is over bought as viewed from the vantage point of the weekly chart
(i.e., it’s above the top supply line of its bullish trend channel). The S&P 500, by the same measure, is very close to the top supply line of its bullish trend channel. In either case, it is likely for stocks to start dropping in response.

Our Relative Strength Sector Table shows that the stock market has become defensive. The Consumer Staples group lost ground but only four out of nine of its sectors were
negative. The Cyclicals Group was the weakest and seven out of eleven of its sectors were losers. All three components of the Finance Group gained. The Technology Group also gained but only because its bio-technology and internet sectors had such huge gains: 6.2% and 7.5% respectively. Semiconductors, Computer Software and Electronics all lost.

Here is the relative strength chart of the Internet Sector:internetHere is the relative strength chart of the Semiconductor Sector:semiconductors

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