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Primary Dealers Are Buying Corporates, A Bullish Sign For Stocks

November 28th, 2012
in contributors

by Lee Adler, Wall Street Examiner

Primary Dealers’ corporate bond holdings have been in a secular downtrend since 2007, but there have been periods of weak cyclical rebounds. These occurred in early 2009, in the second half of 2010, and lately over the past 2 months, with a false start back in March 2012.

In each of those cases, the recovery began either slightly ahead of or coincident with big cyclical upswings in the stock market. Downturns in this measure have also preceded the last 3 stock market swings to the downside.

Follow up:

Given this pattern, this looks like a bullish intermediate term indication for stocks, at least until the Dealers’ total of corporate bond holdings turns back down.

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This is an excerpt from the Wall Street Examiner Professional Edition Fed Report.

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About The Author

Lee Adler is the editor and publisher of The Wall Street Examiner, host of Radio Free Wall Street, and moderator of the Wall Street Examiner Forums and Bears Chat, and the Stool Pigeons Wire – Capitalstool.com.










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