NASDAQ LEADS MARKET INTO BAD END FOR THE WEEK -- INTERNET-RELATED STOCKS LEAD TECHNOLOGY SECTOR LOWER -- AMAZON.COM BREAKS 200-DAY AVERAGE -- THAT'S ALSO BAD FOR CONSUMER DISCRETIONARY STOCKS WHICH ARE BIG FRIDAY LOSERS

NASDAQ LEADS MARKET LOWER ... A 3% loss in the Nasdaq market is pulling the rest of the market lower. Chart 1 shows the Nasdaq Composite Index bearing down on last week's low. The Nasdaq/S&P 500 ratio (below chart) has plunged to the lowest level in a year. That's a bad sign for the Nasdaq and the rest of the market. Internet stocks are being hit especially hard. Amazon.com is down another 6% and has fallen below its 200-day moving average. Tesla Motors (TSLA) is down another 9%. Wednesday's message showed the recent breakdowns in both stocks. Those are the two biggest Nasdaq losers for the week. The plunge in Amazon is also hurting consumer discretionary stocks.

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Chart 1

CONSUMER DISCRETIONARY SPDR WEAKENS... Economically-sensitive stock groups like cyclicals continue to lead the market lower. Chart 2 shows the Consumer Discretionary SPDR (XLY) down nearly 3% on the day, which makes it one of the day's weakest sectors. The XLY/SPX relative strength ratio (below chart) has fallen to the lowest level in six months. That's bad for it and the rest of the market. Weakness in those stocks suggests that investors are losing more confidence in the market and the economy.

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Chart 2

AMAZON.COM BREAKS 200-DAY LINE... Wednesday's message showed Amazon.com (AMZN) testing its 200-day average. Today's version of the same chart shows the stock having fallen below that long-term support line. As already suggested, Amazon is the biggest holding in the XLY SPDR. It's also one of the biggest recent losers in the Nasdaq market.

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Chart 3

MARKET TAKES A TURN FOR THE WORSE... Despite the market's recent bounce, most longer-term indicators remain in negative territory. This week's downturn in the consumer discretionary and Internet technology stocks is a sign that the market has taken a turn for the worse. We'll take a more in-depth look at the week's technical damage in my Saturday message.