My understanding is that the bond market tends to be a good deal wiser and less prone to chicanery than the stock market, and thus it often serves as a vital clue to when a market is about to head lower.
On March 16, LQD – the ETF based on investment grade corporate bonds – had a nice bullish breakout which should have presaged a steady series of much higher prices. Instead, on March 24th, the breakout failed, and the pattern is invalidated.
Failed bullish breakouts at the top of hugely upward runs are a favorite of mine, so I shorted this a day or two ago. It's a slow mover, but I think it could easily be worth a couple of points on the downside.
