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

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." 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. 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... Tags: Bonds To get full access to all Money Morning content, click here About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free . Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors. Disclaimer: © 2018 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201. The post Here's What March Told Us About the Coming Bear Market appeared first on Money Morning - We Make Investing Profitable .