Stocks zoom higher and are even more overvalued

The stock indexes, especially the Nasdaq Composite, roared higher on Friday following news of 3% GDP growth in the 3rd quarter. Bit without inventory growth, the GDP would have been closer to 2.5% Many other details about the underlying weakness here. Before the great recession, 3% GDP growth was a floor, not a ceiling.

FANG, Facebook, Amazon, NetFlix and Google, all zoomed higher on Friday. My relative-strength stock-market sector table shows losses, however, in each of the four sector groups. Widespread weakness along with a stock market high is explained by the narrow nature of the advance. Some of my sectors took a deep plunge such as the pharmaceutical and bio-technology sector that dropped an astonishing 14.2%. Other sectors that were big losers included Automobiles, Aerospace, Media, Consumer, Health Care and Telecommunication Services.

Here is the relative-strength Pharmaceutical Sector chart:

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