The stock market is very defensive but is above its short-term bullish trend line

The trend line drawn from the July 7 low to the July 27 low in the S&P, is still in place (it was punctured on Friday but closed above it. The Dow is much weaker. Friday’s close was below the July 27 low and that low was lower than the July 7 low. So the Dow is in a short-term bearish trend. The Nasdaq Composite is still in the long-term bullish trend that began in the Spring of 2009 following the last recession. Its short-term bullish trend is flatter than its previous short-term bullish trends.

My chart that divides cyclicals by consumer staples is showing a huge increase for the consumer staples and a crash of the cyclicals. I’ve included this chart below. My relative strength sector table shows most of the sectors in the Cyclical Group crashing with the exception of the Aerospace and Leisure sectors, and to a lessor extent the Retail and Transportation sectors. Most of the sectors in the Consumer Staples Group roared higher except for Agriculture and Chemicals that crashed. The Technology Group was also very week. Semiconductors lost a huge 6.7%, Telecommunication Services lost 5.1% and Technical Hardware lost 2.6%.

cyclical_staples

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