The stock markets’ recent drop has left it in the middle of its trading range

The stock markets’ retreat over the last few days have moved it to the middle of its long-term trading range. There are three possibilities. It can roar higher. This is least likely as it just retreated from its recent highs. It can sink below the lows of the trading range and start a bearish trend. This is also unlikely as there was support the last time the price reached those lows. So, most likely, a continuation of the trading range that began in February.

 

My stock market sector table shows the overall weakness of the market. The Finance Group was even, and therefor the strongest group. The Technology Group  posted a gain but it was entirely due to Google. Without it the group has a loss. There was a very small pocket of strength: the Computer Software, Alcohol and Retail sectors all had good growth. The mild growth (about 1%) in the Utilities sector and the mild loss (also about 1%) in the Transportation sector suggest that there is not huge defensiveness in the stock market and that the economy will probably keep inching forward.

 

Below is the relative strength chart of the Basic Materials sector. This shows the current problem of deflation affecting mining. There is a risk of this spreading to the rest of the economy.
basic_materials

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