Investment—Market Topping Process

Figure 1. 2021 - 2022: Bonds ($AGG) → Stock ($SPY) → Commodities ($DBC) 

Market Topping

Market topping is a process which normally includes different asset classes peaking in a specific sequence.  Using tech bubble as an example:

1. Bond market peaked in 1999
2. Stock market peaked in early 2000
• Stock market historically peaks an average of seven months before every recession
3. Commodity market peaked in fall 2000

A bear market is normally triggered by the following series of events:

1. Inflation rises
2. Interest rate rises
3. Oil price rises
4. Fed hikes rate

Note that official recession calls are the responsibility of the NBER Business Cycle Dating Committee.  Since WWII, every recession is preceded by either an oil shock or a Fed's tightening its monetary policy.