Here’s What March Told Us About the Coming Bear Market

This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.

You’ve seen this in cheesy Western movies: an armed standoff that often begins with some variation of “This town ain’t big enough for the both of us.”

Liquidity moves markets!

Follow the money. Find the profits! 

That’s where we are now with stocks and bonds. And we’re rapidly approaching the point where the town ain’t big enough for either of them.

Try Lee Adler's Technical Trader risk free for 90 days!  Subscribe before March 19 and get 20% off the regular price. Follow the money. Find the profits!

The U.S. Treasury continues to pound the market with massive amounts of new supply, but Treasuries held their own this month and even rallied a bit.

Instead, stocks caught it in the neck.

So what’s happening? Nothing good…

It’s a simple question of liquidity, or, more specifically, the lack of it.

As I’ve been telling my Sure Money readers, there’s no longer enough liquidity in the system to support bullish moves in both stocks and bonds.

If one rallies, the other must be the source of funds for that rally. So in March, stocks were the liquidity sink that supported the rally in bonds.

And don’t be fooled by events like we saw this past Thursday, when there were rallies in both stocks and bonds: Neither baseball, nor life, nor markets move in a straight line. They are full of surprises.

But those surprises happen in the context of a broad arc. And right now, that arc is pointing down.

The rapidly deteriorating momentum in stocks and bonds tells us a lot about the bear market I see around the corner…



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The post Here’s What March Told Us About the Coming Bear Market appeared first on Money Morning – We Make Investing Profitable.

Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. I may receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish, and was lead analyst for Sure Money Investor. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both analytical and sales capacities. Prior to starting the Wall Street Examiner I worked as a commercial real estate appraiser in Florida for 15 years. I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. My perspective is not of the Ivory Tower. It is from having my boots on the ground and in the trenches of the industries that I analyze and write about today. 

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