Several High-Flying Sectors Are Crashing All At Once

September 28, 2015 by

market correction bearJohn Rubino:  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.

Biotech ETF

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:

Solar ETF

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.

Junk bond ETF

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 Sept 2015

What does it mean when several high-flying sectors crash all at once?

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