Weakness abounds despite the recent bullish stock-market move

The stock market broke out of its bearish trend and headed up towards the very long resistance area that has been in place since February 2015. The fundamentals remain bearish (e.g., business inventories divided by business sales is at recession levels and continues to increase); so, why isn’t the market sinking? The insiders who control the market will not let it sink until they have unloaded their shares. Investors that have very large holdings have to sell their shares strategically by selling into an up swing. If they didn’t do this. the force of their selling would push the price down thereby giving them a worse price.

 

My relative-strength sector table clearly shows huge weakness. The Cyclicals Group is made up of eleven sectors. All of these have been losing strength except for two that are flat.  There is a bit of strength in the Technology Group in the Technology Hardware, Internet, and Semiconductor sectors. But, this is a very narrow range of strength compared to wide weakness in the combination of Technology and Cyclical Groups. It is strength in these two groups together that pushes the overall market higher.

 

Here is my relative-strength chart of the Transportation Sector:
transportation

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