For those who are wondering what is ahead, a whole lot of pain is coming.

By Bill Fleckenstein President Of Fleckenstein Capital
March 14 (King World News) – Today’s headline refers to the fact that, really for the first time since the Trump rally began, it actually feels like the market may have achieved exhaustion. I am aware that I have noted a couple of potential island reversals (which ended up not mattering); however, today I am just describing how the market feels to me. Of course, I could easily be wrong, but I thought I would at least bring up the point because if I’m right we will see some weakness, followed by a failing rally, followed by a whole lot of pain…

QE Fumes May Prove Flammable
For the last group of years I have discussed my view that any downside that gathered even the slightest bit of momentum could accelerate into a dislocation quickly. When I say “quickly” I don’t mean that as soon as the peak is seen the market will collapse. I mean that if we gather momentum to the downside, between the paid-to-play crowd, ETFs, the public that has piled in, and whatever negative impact derivatives may have, I don’t think you could have created a more combustible mix if you had set out to do so.

Then again, there is the budding problem with world bond markets, which may have seen their 35-year bull market end last summer, and when all that is mixed together, along with geopolitical issues and Trump’s governing style, you really have the recipe for a volatile combination if the collective mindset of the world’s investors starts to change.

I don’t want to get too far ahead of myself, but I haven’t had much to talk about from a strategic standpoint for a while so I thought I would bring all that to everyone’s attention.

Absence of “Why” Catches the Eye
As for today’s action, the market bolted lower right out of the blocks and within a couple of hours the indices were roughly 0.75% lower, for no particular reason (which is exactly what I found interesting). But then they started to rally in the afternoon and were down less than 0.5% with a couple hours to go, when I had to leave.

Away from stocks, green paper was higher, oil lost another couple of percent, fixed income was a bit firmer, and the metals were flattish.

Let’s Get Straight To the Points
We get the Fed announcement tomorrow and in the wake of that it should be very interesting to see how all these markets trade, especially if a turn in the tide is at hand…..more here