Monday’s stock market drop wasn’t bearish; subsequently the market rose

The stock market suffered a big drop on Monday. At first glance it was bearish because the range was big and it closed at the day’s low. But, if it had been bearish, the market would have continued its drop and eventually plunge through the March lows. Instead, the market moved higher. But the weakness caused by the Monday drop is pervasive.


The stock market turning defensive is mirrored by the Utility Sector rising a very high 5%. Another defensive sector, Food and Beverage, rose 0.6% after being down -1.1%. The Technology Group was hit the hardest: the Semiconductor, Technology Hardware and Electronics sectors all lost big. The stock market performs much better when Technology and Cyclical Groups are strong.  Instead, in my latest sector report, the Technology and Cyclical groups both lost strength.


Here’s the relative strength chart of the Semiconductor sector:

Put in your name and email for our
free weekly stock newsletter

You'll get:

* Weekly Emailed Stock Market Analysis

* Trading Educational Tips - once or twice a week



  • Every trader, no matter how good, has losses.


    The only ones that don’t are Ponzi schemes.

  • What kind of results will I get?


    You’ll get more wins than losses and average gains bigger than losses.

  • But, you need more than just good trades!


    Too much risk leads to disastrous losses.

    Geometrically increase your results with the correct use of risk.

  • How do I get started?


    Click subscribe (on the menu) and make a selection.

    Submit and you’re set to go once you receive a return email.