FANG support is still dropping

The S&P 500 has moved sideways and the Nasdaq composite has dropped over the past week while the Dow has continued to move higher, approaching the top of its bullish trend channel. The S&P and Nasdaq are still within their shrunken bullish trend channels where the top of the channel has not kept pace with the advance of the lows. Money seems to be flowing away from growth stocks and toward bigger, more defensive plays.

Facebook has dropped since reaching a high on July 27. Ditto for Amazon, but the drop has broken the bullish trend line that started in January. Netflix and Google have also dropped since July 27, but are still within their bullish trends. So, what is forcing the market higher? It is certainly not the companies in the Transportation Sector; it has sunk by over 7% since early July after rising by 12% in June. This drop implicates manufacturing and the types of businesses that support it.

My table of relative-strength stock sectors continues to show a divide between the Technology and Cyclicals Groups; the Technology Group gained 2.3% since early July while the Cyclicals lost 0.2%. Instead of the rally being broad based, it seems to be supported by an ever smaller part of the market.

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