Only the Nasdaq is bullish

The average share in the stock market is roughly 24 time earnings. This is a nose-bleed high. The historic average is about 14. The stock market will have to drop by half in order to get back to its historic valuation. The high level of inventories (i.e., 1.4 inventories by sales) is another signal of weakness in the economy. This level is attached to coming recessions. But, the most important number underlying economic weakness is the almost historic low size of the U.S. workforce.

My Technology Hardware Sector gained a very high 3.7% since May 1; this is second only to the Computer Software Sector. Here are the 3-year sales growth figures for the eight stocks in this index:

Symbol 3-Year Sales Growth
PBI -5%
STX -10%
XRX -23%
NTAP -6%
HPQ -31%

The average is -8%. There are very few stocks that are supporting the entire stock market. The biggest of these are Facebook, Amazon, NetFlix and Google.

Here is the relative-strength graph of the Technology Hardware Sector:

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