The stock market is taking a pause after its recent five-week rally, but it doesn't appear that investors are all that concerned about a major pullback or change in the primary trend. In the daily chart of the S&P 500 below we can see the broad market rolling over and getting ready to test its 50-day moving average. A bearish crossing of the MACD last week is further indication that momentum has changed and we should be prepared for more short-term weakness ahead.
But the recent round of selling just looks to be the trimming of positions heading into this week's FOMC meeting. The RRG chart below shows the relative strength and momentum of the S&P sectors and you can see that economically sensitive areas are still performing well. At the moment Technology and Health Care sectors are leading the pack, with Consumer Discretionary (cyclicals) and Financials following close behind. The defensive ... Log in or subscribe to continue reading.