The Zigmont Report (Daily Market Recap for 1/31/19)

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 and do not necessarily represent those of Harvest Volatility Management, LLC.

The cherry on top.  The bulls must’ve stumbled across a magic lamp because January was a wish come true.  Today included modest rally to cap off a spectacular month.  The S&P was up 7.9% for the month and from a sentiment standpoint, December is ancient history.  January’s rally was the largest monthly gain for the S&P since October 2015 and it was the best January since 1989.  That’s impressive even considering the widely known January Effect.

December was a 9% stinker.  Jan was an 8% winner.  What’s in store for Feb?  Beats the heck out of me but as a betting man, I think modest downside is the wager.  When it comes to potential fundamental catalysts in February that could put a trend in motion, I think the big ones are pretty limited.

  • US/China trade resolution (very bullish)
  • Further economic softening (modestly bearish)

If we get no clarity on either of these issues, we should be stuck.  The emotional shifts from day to day will inject some volatility into the market but I don’t think we will veer off in a direction.

We shall see I.

Anyway, the longs are off to a great start for the year and the bears are in trouble.  Without a major catalyst at work, I don’t see how one camp can exert its will upon the other… famous last words probably.

See you Monday, have a great weekend.