China announced that it will levy 25% tariffs on 106 products that are produced in the US including soybeans, automobiles, chemicals and aircraft. The news pretty much guarantees that the share prices of Caterpillar and Boeing which were down substantially on the news will not eclipse their early 2018 all-time highs for years. For this reason, China’s Tariffs are the 10th Nail in the coffin of the 2009 secular bull who died in January 2018.
The 10th Nail was preceded by Amazon’s. See my article “Trump Sledgehammering AMAZON Nail into 2009 Bull’s Coffin”. The newest nail further increases the probability that the market will not get back to its January 2018 all-time high for at least eight years. This makes it more likely that the new secular bear market was born in January 2018. The chart below which includes the duration of all the eight secular bulls and bears since 1802 depicts the shortest lifespan for a bull or a bear being 8 years.
The chart below which depicts the stock market’s bubbles since 2007 is based on the price history of the S&P 500 versus long-term US government bonds for the period of 2003 through February 2018. The large bubble which had been in place prior to the election of Donald Trump as U.S. President has expanded significantly.