The stock market has terrible fundamentals

The stock market has been in a short-term bullish trend since its mid February low. It is just under the S&P’s bearish trend line and is below a very large resistance area created with the stock market’s long sideways move during most of 2015. But, the stock market fundamentals are terrible and not commensurate with the bullish move. The $86.46 per share of the S&P 500 at the end of 2015 was only 0.22% higher then the same value in June 2007, just before the last recession. Compare this with the 6.8% increase from $54 per share in mid 2000 to the June 2007 level. Add to this the loss of 1 million 40 hours-per-week “regular” jobs since December 2007.

The underlying weakness in the stock market can also be seen in my stock market sector table. It shows a large increase in defensiveness shown by a large 2.5% increase in relative strength in the Utilities Sector since March 1. Add to this the weakness in the Technology Group as it lost 0.3% mainly due to a huge 3.7% loss in the Pharmaceutical and Bio Technology Sector.

Here’s the relative-strength chart of the Pharmaceutical Sector:

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