• 4 days Quantum Computing Is The Newest Megatrend In Silicon Valley
  • 5 days How To Invest In The Cybersecurity Boom
  • 7 days Investors Are Patient With Unprofitable Giants
  • 9 days Wells Fargo Back In The Scandal Spotlight Once Again
  • 11 days 5 Stocks To Keep A Close Eye On This Year
  • 12 days As Auto Giants Flail, Look To Chip Stocks For Gains
  • 13 days Central America Is Ready For The Bitcoin Hustle
  • 15 days China’s Video Game Restrictions Unlikely To Slow Down Booming Industry
  • 16 days Top Performing Stocks As Inflation Fears Grow
  • 17 days US Airline Stocks Take A Beating On New EU Restrictions
  • 18 days This IPO Could Open Sustainable Fashion Floodgates
  • 19 days Crypto Crime Nets Another $2B Fraudster
  • 21 days This Week’s Hottest Meme Stocks
  • 22 days Why World Markets Should Be Watching Germany Closely
  • 24 days Could ‘Cultured’ Meat Rival The Plant-Based Megatrend?
  • 27 days ‘Easy Money’: Crypto Is Still Attracting Newbie Investors
  • 28 days Foreign Syndicates May Have Stolen Up To $400B In COVID Benefits
  • 29 days Gold Jumps Above $1800 Ahead Of Jackson Hole Summit
  • 29 days International Banks Blacklist Afghanistan Following Taliban Takeover
  • 31 days China’s Tycoons Are Getting A Serious Reality Check
John Rubino

John Rubino

John Rubino edits DollarCollapse.com and has authored or co-authored five books, including The Money Bubble: What To Do Before It Pops, Clean Money: Picking Winners…

Contact Author

  1. Home
  2. Markets
  3. Other

Whole Lotta Bear Markets Goin' On

The Dow and S&P 500 have fallen by around 10% since August, which in normal times would be hardly worth mentioning. But below the surface, in what used to be the market's hottest sectors, much more serious damage is taking place.

Biotech, which had an epic bull market during the era of QE and the Affordable Care Act, had begun to crater even before Hillary Clinton proposed price controls for pharmaceuticals. Last week it went straight down.

IBB Daily Chart

Solar stocks had a quiet bull market that accompanied the technology's emergence as heir apparent to fossil fuels. But now they're quietly crashing:

TAN daily Chart

Junk bonds, which are essentially the equities of highly-leverage companies (because they turn back into equity when the bonds default and reluctant creditors are forced to take ownership of the junk issuers) have tanked in the past few months and are now far below their 50 and 200-day moving averages.

HYG Daily Chart

One group that isn't plunging is the gold miners. But that's mainly because they had their crash while everything else was still rising, and are now at historically cheap levels. Here's an ETF that tracks the junior gold mining stocks:

GDXJ Daily Chart

What does it mean when several high-flying sectors crash all at once? If history is still a reliable guide (a big if in today's manipulated world) it means the internal structure of the market is deteriorating much more quickly than the behavior of the Dow and S&P 500 seem to imply.

When stocks in general catch up to the carnage in yesterday's hot sectors, we'll get something a lot more extreme than a simple correction. And when that happens the odds of the Fed raising US interest rates drop to zero.

 

Back to homepage

Leave a comment

Leave a comment