The stock market is now bearish

All three major stock indexes, the Dow, S&P and Nasdaq Composite, are in a bearish trend that started in the last week of April. The Nasdaq is, by far, the weakest of the three. In good times, the market is led higher by the Nasdaq, now it is being pulled down. The widest measure of the stock market is the Wilshire 5000. It is eleven times above its 1989 value. But there are 22% fewer goods-producing (i.e., $56,000 average wage) since that same 1989. The Federal Reserve, since the 1980’s, and along with central banks around the world have made a few on Wall Street wealthy while ignoring Main Street. The average production worker wage was $383 per week in the middle of 1987. Today, 29 years later, it is $380 per week. During that same 29 years, the Fed’s balance sheet went from $200 billion to $4.5 trillion – a 23 times gain.

My relative-strength stock sector table mirrors the weakness in the paragraph above. The Technology Group is suffering from big losses in six of its seven sectors. The only one rising is bio-technology: it’s another highly overpriced bubble ready to pop. Here are the biggest moves by individual sectors since April 1: Banks dropped from 6.6% to 3.9%, Health dropped from 1.9% to 0.5%, Alcohol and Tobacco zoomed up from 0.2% to 2%, Agriculture dropped from 5.7% to 2.1%, Autos crashed from 3.2% to -2.5%, Energy was down from 6.4% to 2.4% and Leisure exploded up from -1.6% to 7.7%.

Here is the chart of the S&P 500:

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