The bond bubble explodes – now the clock is ticking for the stock market tumble

Research shows that the the U.S. Government bond market (e.g., U.S. 10-Year Note) leads the stock market, in terms of trend changes, by six months to 1 1/2 years. It was six months before both the 2006 and 2000 recessions. If it’s six months this time, it would make it early January that the stock bubble explodes. The Nasdaq’s big drop on Thursday and Friday could lead the whole market lower. The Nasdaq has many large technology companies. Stock bear markets are led by a selloff of growth stocks in general and technology companies in particular. The Dow gained the most: 5.6% since November 1. The S&P gained 3% and the Nasdaq Composite gained the least: 1.18%.

My relative-strength stock sector table shows big losses in the Technology (-2.61%) and Consumer Staples (-2.44%) Groups. The Cyclical Group zoomed higher on just four sectos: basic materials (19.2%), machines (7.3%), aerospace (6.8%) and transportation (10.1%). The other 7 sectors in the Cyclical Group were wither flat or significantly lower. The Basic Materials Sector gained an unbelievable 19.2% since November 1.

Symbol   3 year sales growth
PAAS -8%
NEM -8%
CLF -35%
AUY -2%
FCX -15%
ABX -14%
X -19%
NUE -8%
NCS 10%
CNC 48%
MT -12
ATI -8%
VALE -22

The average 3-year sales growth for group above was -5.7%. This is simply awful for the fastest growing sector. Isn’t it?

Put in your name and email for our
free weekly stock newsletter

You'll get:

* Weekly Emailed Stock Market Analysis

* Trading Educational Tips - once or twice a week



  • Every trader, no matter how good, has losses.


    The only ones that don’t are Ponzi schemes.

  • What kind of results will I get?


    You’ll get more wins than losses and average gains bigger than losses.

  • But, you need more than just good trades!


    Too much risk leads to disastrous losses.

    Geometrically increase your results with the correct use of risk.

  • How do I get started?


    Click subscribe (on the menu) and make a selection.

    Submit and you’re set to go once you receive a return email.