Mike Zigmont Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide. Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business

since 2008, sending it daily shortly after the market close.


The opinions expressed below are my own

Bulls running. Like so many other days, we didn’t get interesting news. Capital flow was light again at 89%. Investors essentially remain on the sidelines. It should’ve been a meandering go-nowhere day but the S&P rallied a substantial amount.

If there’s something interesting and surprising about today it’s that interest rates climbed across the curve and the 10-year Treasury yield finally hit 3%. That was thought to be a significant level that might have negative equity consequences.

Au contraire.

At least for today. I think the equity momentum players and the perpetual dip-buyers simply did what they like to do today and the valuation considerations took a back seat.

I think the bears will get their turn shortly. I don’t think they take us to new lows for the year but I think this latest bullish swing is about over.

Interest rates are climbing. They took a bit of a break but it looks like they are about to resume their upward path. This matters. It will only be a matter of time before valuations adjust.

Here’s the plot of the 3-month T-bill yield

Here’s the plot of the 5-year’s yield

The Fed has made it as clear as day that they will continue to hike rates.

The whole yield curve is heading higher.

Equity upside (at these valuations) doesn’t look like a play I want to make. It’s all hope and tape-chasing at the moment.

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