The Zigmont Report (Daily Market Recap for 1/8/18)

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

5 for 5.  US equity futures were down small before the open and the S&P opened down small as well.  The selloff lasted for the morning and we ticked positive from lunch on.  Capital flow was about average at 103%.  News today was of the trivial variety.

If there’s one vibe building out there, it’s a borderline mania for stocks.  Fear of missing out is becoming an investing motivation versus an amusing offhand remark.

The fact that the S&P is up 2.75% already this year has strategists, analysts, and technicians scrambling.  The calendar-driven researchers are pointing out that when the S&P goes up more than 2% in the first 5 days of the year, the equity market usually returns 20-plus percent for that year.

There are many other calendar-based return studies that look at other things but spit out incredibly bullish predictions.

I think they’re mostly garbage….but that isn’t what’s important.  What’s important is that people are *finding justifications* to get long and those justifications aren’t robust.  Any and all reasons to get long are good enough to drive behavior.

I have no ability to predict the end of this rally because I have no feel for the tolerance of the market right now.  Optimism is bulletproof and building.

I find this silly.  I think the market is way out over its skis.  Is it going to come to its senses soon or in 6 months?  That’s the rub.

See you tomorrow,
-Mike