The stock market retreats, again!

The market retreated substantially on Friday. The Nasdaq Composite and S&P did so after equaling their mid-April highs. The Dow is weaker then its two siblings as it didn’t equal its April highs, recently. When viewed from the weekly-bar perspective: the Nasdaq Composite has had a series of lower highs and lower lows since the early July high. The S&P’s highs in October, April and the recent one were all at a similar level and well under the July high. The Dow has a similar weekly picture to the S&P, but its April high was higher than both the October and recent highs. Technically, weakness abounds.

My relative-strength market sector table shows big weakness in the Financial Group. It is very hard for banks, financial firms and insurance companies to operate profitably in a central-bank-induced period of exceptionally low interest rates. The Technology Group was also extremely weak. The market goes higher when there is widespread gains among the Technology and Cyclical Group companies.

The U.S. labor market is much worse than many understand. One way of understanding this is by looking at labor in terms of hours instead of jobs. The The U.S. Labor Department counts a 15-hour per week pizza delivery driver the same (i.e., one job) as a 40-hour corporate accountant. Hours worked increased in the 1970’s by 2% per year. It was up to 3% during Reagan’s 1980’s but has been an abysmal low of only 0.15% per year since the Fed started “printing” on steroids in December, 2000. So, that’s many fewer hours of available work along with an ever-increasing quantity of workers.

Here’s the chart of the S&P 500:


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