The Stock Market is Still Sluggish and Defensive

The S&P rose nicely on Thursday but could hardly move on Friday. It closed Friday under the April 22 high. The Nasdaq Composite is much weaker then the S&P. But, it moved above the mid pointof the drop between April 27 and May 6 on Thursday and Friday. This also pushed the Nasdaq Composite back inside its bullish trend channel that began in February. The DOW is the strongest of the three stock indexes. But it also moved virtually nowhere during the day on Friday. It’s just below its March 3rd high. The Dow being stronger reflects the generally defensive and sluggish nature of the stock market.

 

The overall graph of cyclicals divided by consumer staples shows the consumer staples with a big advance this week. This underscores the defensive nature of the market as indicated by the big gains in the DOW. In the Cyclicals Group: Autos, Building, Machines and Leisure improved, while Energy, Media, Real Estate, Retail, Basic Materials and Transportation all fell. The Consumer Staples Group grew at twice the rate of the Cyclicals Group. This is defensive, again.

 

It’s time to be extra cautious and careful both picking stocks and watching and maintaining holdings.

 

Here’s the relative strength chart of the Leisure Sector:leisure

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