{"id":26876,"date":"2026-04-16T07:30:00","date_gmt":"2026-04-16T11:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=26876"},"modified":"2026-04-15T17:01:51","modified_gmt":"2026-04-15T21:01:51","slug":"liquidity-bust-could-lead-to-a-double-dip-for-stocks","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/liquidity-bust-could-lead-to-a-double-dip-for-stocks\/","title":{"rendered":"Liquidity Bust Could Lead to a Double Dip for Stocks"},"content":{"rendered":"\n
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Managing Editor\u2019s Note: <\/strong>Today, we\u2019re hearing from our contributing editor, Mike Burnick, in his weekly Thursday feature.<\/p>\n

Mike brings 30 plus years of hands-on market experience \u2013 from trading floors and research desks to running his own mutual fund as a registered investment advisor \u2013 and now leads multiple TradeSmith advisories including Constant Cash Flow, Infinite Income Loop, and Inside TradeSmith.<\/p>\n

Now, here\u2019s Mike\u2026<\/p>\n<\/div>\n\n\n\n

Liquidity Bust Could Lead to a Double Dip for Stocks<\/h2>\n\n\n\n

BY MIKE BURNICK, CONTRIBUTING EDITOR, MARKET MINUTE<\/em><\/strong><\/p>\n\n\n\n

That was fast.<\/p>\n\n\n\n

Stocks surged higher once the calendar turned to April, with the Nasdaq 100 Index moving up 10 days straight for a gain of 13.2% off the March 30 low.<\/p>\n\n\n\n

But it may not last.<\/p>\n\n\n\n

As oversold as stocks were on March 30, the market is nearly as overbought today.<\/p>\n\n\n\n

The S&P 500 Relative Strength Index (RSI) for instance, a great measure of a market\u2019s momentum, traveled from under 30 just three weeks ago (oversold<\/em>) to near 70 today.<\/p>\n\n\n\n

That\u2019s right on the doorstep of an overbought market.<\/p>\n\n\n\n

Also, the percentage of S&P 500 stocks above the 20-day moving average skyrocketed above 70% this week from just 20% three weeks ago.<\/p>\n\n\n\n

So, if you took my advice to buy quality stocks on the dip, now is the time to consider taking at least some partial profits.<\/p>\n\n\n\n

That\u2019s because two seasonal factors are now converging that could lead to another dip.<\/p>\n\n\n\n

First<\/em><\/strong>, the month of April is generally kind to the stock market. The S&P 500 is up 63% of the time this month over the past 90+ years.<\/p>\n\n\n\n

In fact, April\u2019s win-rate is second only to December\u2019s 71%.<\/p>\n\n\n\n

But dig deeper and you\u2019ll see that April\u2019s stock market performance is front-end loaded.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Stocks perform well in the first half of April, but typically peak in the third week of the month and decline into month end.<\/p>\n\n\n\n

Typically, taxpayers who expect IRS refunds have an incentive to file their taxes early to receive a refund check sooner.<\/p>\n\n\n\n

While those taxpayers who expect to owe money wait until the deadline to file.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Historically, this leads to an early spike in tax refunds, which typically peak around the end of February.<\/p>\n\n\n\n

In other words, the liquidity boost around tax refunds, which often find their way in financial markets, is largely over. And now we may see a liquidity bust.<\/p>\n\n\n\n

Non-withheld tax payments are set to drain more than $500 billion from the banking system over the next few weeks, according to data from Strategas Research.<\/p>\n\n\n\n

Second<\/em><\/strong>, this pattern is fueled in part by the timing of tax refunds around April 15th<\/sup>.<\/p>\n\n\n\n

That lack of liquidity may not be enough to completely reverse the three-week stock market rally. But it could be enough to produce another buyable dip in stocks.<\/p>\n\n\n\n

That\u2019s especially true considering the still highly fragile ceasefire with Iran and oil prices still 50% higher than before the conflict began.<\/p>\n\n\n\n

Mike Burnick\u2019s Bottom Line<\/em><\/strong>:<\/strong> Stocks produced a nice bounce from very oversold levels as expected. Now comes a potential retest. The upside gap in the S&P 500 cash index at 6,700 looks like an enticing target for a pullback.<\/p>\n","protected":false},"excerpt":{"rendered":"

Stocks surged higher once the calendar turned to April, but it may not last.<\/p>\n","protected":false},"author":100,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[155],"newsletter-type":[],"ticker":[],"class_list":["post-26876","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-mike-burnick"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26876","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=26876"}],"version-history":[{"count":3,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26876\/revisions"}],"predecessor-version":[{"id":26888,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26876\/revisions\/26888"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=26876"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=26876"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=26876"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=26876"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=26876"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=26876"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=26876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}