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
Trade worries! Well whaddya know? The bolt-from-the-blue catalyst was…. trade war rhetoric from Trump over the weekend! Trump threatened more protectionist actions and China and Europe didn’t back down. The investing world is finally… FINALLY, thinking that maybe this trade war song and dance can result in some negative outcomes.
At the end of the day, stocks rallied from the lows as Peter Navarro, Director of the National Trade Council, made calming remarks about how the markets should let the negotiation process play out.
I’m hopeful for the best but there’s a difference between hoping for the best and preparing for the worst. Markets have only done the former, which is shockingly unusual.
I fully expect the market to rally tomorrow, assuming Trump doesn’t drop another trade war bombshell overnight.
The bulls are looking at today’s drop as a gift. It’s a dip to buy with both hands, *as long as* the trade rhetoric can be ignored. The Navarro comments and a non-aggressive evening from the White House will give the bulls the confidence they need to do what they want to do.
I don’t blame them but I think there’s smoke out here. The bulls are ignoring it and I don’t like that risk/reward.
Like I said, I think the bulls are going to ramp up the tape tomorrow but I would not join in despite the giddiness they will exude.
See you tomorrow,