Of these, bears look to have an edge. The relationship between consumer discretionary and staples stocks has been in a slow decline, which in the past has led to big sell offs, but the market has refused to buckle and is trading in a manner much like it did in 2006. If the latter pattern was to repeat it could be another year before sellers regain control.
The Dow Theory set up is also in bears favour. Transports have struggled despite low oil prices. This is a worrying trend as it started in 2014 and doesn't look like improving any time soon. Technicals have also stayed on the bearish side since early 2015.
Nasdaq breadth has kicked back in bulls favour, although the Summation Index is overbought. By this measure, markets are still in their Primary (rising tide raises all ships) Gain Phase, than the Sector Rotation phase. The latter could suggest multi-year gains lay ahead - contrary to what the previous two charts suggest.
The new highs - new lows relationship also suggests there is more to come from bulls
Although value buyers may find more joy with Commodities which are in the discount bin of international assets.
Let's see what the rest of August brings...
You've now read my opinion, next read Douglas' and Jani's.
I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for "fallond".
If you are new to spread betting, here is a guide on position size based on eToro's system.
Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.
Follow Me on Twitter
Dr. Declan Fallon is the Senior Market Technician for ChartDNA.com, and Product Development Manager for FirstDerivatives.com. I also trade on eToro and can be copied for free.