The stock market turns defensive as weakness hits technology

The Dow is the weakest stock market index followed in strength by the S&P and the strongest is the Nasdaq. In the Dow, Wednesday’s down thrust took the price, temporarily, below the July 27 low. Friday’s up bar had the lowest volume in more than a month. The short-term bullish trend is still in place for the S&P 500 despite it being penetrated a number of times this week. But, it has consistently closed above it since the trend began on July 7. The Nasdaq has been in a gradual bullish trend since late March. Wednesday’s down thrust almost touched the bullish trend line.

The sector table shows much bigger weakness than do the stock market indexes. Every sector in the Technology Group lost strength except for the Internet Sector (due to Google).But, only three sectors in the Cyclical Group lost strength. The biggest loss was in the Media Sector that lost an amazing 8% since August 1st. The Utility sector has zoomed higher as investors have fled to the safety of defensive stocks as the stock market tries to get rid of selling pressure. I’ve included below my chart of Cyclicals divided by Consumer Staples. Note how the defensive consumer staples have been gaining strength recently.

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