Stocks moved lower for the third consecutive day on Friday, something that hasn’t happened in more than three weeks, as the bulls just couldn’t capitalize on a short-term overbought condition. Measures of selling pressure eased as the bears rested their knuckles after a two-day pummeling.

Investors are worried. The big question – as always – is whether the primary uptrend remains intact.

And the answer is yes.

To understand just what that target should be, let’s take a look at where we are right now.

Just before Wednesday’s sell-off, measures of the supply of stocks moved to new lows, while demand moved to new highs. This means bull-market-trading rules remain in effect. But as the cyclical bull market matures a little, we need to change the target of our buying efforts.

Although it looked like losses would be cut in the early afternoon, a lack of demand resulted in the major U.S. indices settling gently

Uncertainty over the global economic outlook yesterday took its toll on stock markets around the world as risk aversion favored safe-haven assets such as government bonds, the US dollar and Japanese yen.

In the US, stocks declined to their lowest levels since the end of May as investors await the start of the second-quarter earnings season.

I referred to the CBOE Volatility (VIX) Index in a post yesterday, and specifically to its use as a contrary indicator. The VIX, also known as the “fear index”, closed the day 6.4% higher.

All ten US economic sectors fell, confirming a pattern of the defensive-oriented sectors such as utilities, health-care and consumer staples outperforming the cyclical sectors like energy, materials, industrials and consumer discretionary. The chart below shows the performance of the sectors since the high of the S&P 500 Index on June 2, 2009 - a relative pattern as one