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

Predictable. US equities bounced in response to yesterday’s drop. The market climbed slowly and steadily until it topped out around

2:30 PM ET

. That’s par for this market. The tape weakened into the close however. That’s a little bit different.

The reason for the weakness appears to be twofold.

  1. John Taylor appears to be in the lead for nomination for next Fed chair
  2. This news broke around 3:00 PM and was the result of a show of hands by Senate leadership at a meeting with the President
  3. The market views Taylor as more hawkish than Yellen
  4. GOP Senator Jeff Flake announced he would not seek reelection and took a very strong swipe at the President and the current “ disrepair and destructiveness of our politics.”
  5. This throws yet another wrinkle/roadblock into the tax reform process

My point is simply that a couple of news items weakened the tape late in the day and the cause-effect seems very reasonable. The tape didn’t collapse so the bulls are still in the catbird seat.

Markets remain very quiet too. The probability of a Fed hike in November is 0% and the probability of a hike in December is 84%. Earnings are beating left and right. Individual stocks are not trending higher or lower after they announce – it’s a mix. The earnings season narrative may be bullish but at the individual name level, it’s a blah season.

It’s early. Lots of reports still ahead.

See you

tomorrow

,

-Mike