Defensive Sectors Gain as the Nasdaq exhibits selling pressure

The stock market advanced last week and the S&P moved back above its long-term bullish trend line (the Nasdaq Composite has been above its long-term bullish trend line for a few weeks). Only the Dow remained below its line. On Friday, the Dow and S&P 500 made reasonable gains during the trading day. But the Nasdaq Composite went nowhere after a gap higher at the open. The presence or absence of gains during the trading day is what is important; the gap should be ignored. So, the Nasdaq is exhibiting selling pressure and it’s closest to the long-term resistance area that’s above all the indexes.

My relative strength stock sector table shows the defensive Consumer Staples Group with twice the growth of both the Technology Group and the Cyclicals Group. My chart that divides the cyclicals by the consumer staples confirms this, showing the cyclicals continuing to sink. Two notable areas of Cyclicals’ weakness was in the Retail sector losing 7% and Automobiles losing 3.3%. The stock market is weaker when the consumer staples are leading.

Here’s the relative strength chart of the Retail Sector:

retail

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