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
Enough! Asian bulls said enough. Then European bulls said enough. Then US bulls said enough. There weren’t any zinger news items to inspire the bulls but they didn’t need inspiration once things got rolling. The Nikkei rallied 1.5%. The Euro Stoxx 50 rallied 0.5%. The S&P 500 rallied 0.8%.
If there’s an interesting subplot to this, it’s that we only opened up 10 points (40 bips). The rest of our rally happened during the session. I find this interesting because a lot of headlines will say that Cisco’s and Walmart’s awesome earnings were behind the rally. Others will say the House passing their version of the tax reform bill was the cause. Well Cisco announced last night and Walmart announced at 7 AM. The tax bill was passed late in the afternoon, around the intraday highs actually.
There was no key driver of the rally. In my mind, the rally simply happened organically and the buyers simply piled on with each and every point gain. The dip-buying sentiment reinforced itself as the tape climbed and I think it’s as simple as that.
Now that the bulls have counterpunched, I can’t wait to see what happens tomorrow.
Sentiment is the prize. That’s what the market is fighting over. Bears spent about a week wrestling little pieces of it away. Bulls just replied with a haymaker. Who’s going to own Friday and give the other side all weekend to think about its black eye?
There’s no big news pending tomorrow so I think we’re just going to follow Asia and Europe and the momentum will carry the day.
How they go, we shall go.
See you then,