The S&P and Dow are in wedge patterns; the Nasdaq Composite broke above its wedge

The S&P and Dow are in wedge patterns that started in early November. The Nasdaq Composite shows a similar pattern. But, its wedge was broken as the Nasdaq Composite continued to move higher. The average share is still about 26 times earnings; the historical average going back decades, is about 14. The stock market will have to sink by half to get back to this historical average.

My table of relative-strength stock-market sectors shows a swerve to defensiveness. The Commercial Services and Supplies Sector has advanced by 3.5% in February (and February has six trading days left) following a 2.2% gain in January. The Consumer Sector has gained 1.6% in February following 2% in January. The Alcohol and Tobacco Sectors has gained for three straight months. The Cyclicals and Technology Groups have lost strength. The Semiconductor Sector gained 5.8% last month but has lost 0.2% in February. The Technology Hardware Sector plunged from gaining 6.2% in January to losing 0.6% in February.

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