The Zigmont Report (Daily Market Recap for 11/23/18)

Mike Zigmont

Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $12B 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.

Food coma.  Today was a shortened trading session and flow was 63%.  That’s very light but very normal for the day after Thanksgiving.  With such little activity, we shouldn’t read too much into the day’s action.  Crude remains in freefall.  The energy sector was punished.  Crude is starting to influence the broader market.

Today produced a modestly down day where premarket futures really sank as we approached the open.  Like usual, there was no headline to blame.  For whatever reason, bears controlled the futures in the premarket and tried to crack the market.  It didn’t work as bulls repaired most of the damage before lunch.  The bulls couldn’t go all the way though and they faded into the early close.

So bears get the win and whatever technicals they are trying to manipulate, they pushed them slightly in their favor.  The charts and the lines and the triangles and the squiggles and the whatever-they-look-at probably undid whatever bullish signals sprung up on Wednesday too.  This means that if the bulls act on Monday, they will do so solely in *anticipation* of a turn/bounce.  They won’t be jumping into an already-in-progress rally.

That’s a small difference but still meaningful…

In almost every dip for the last few years, the biggest rallies came a few days after the bottom.  Investors could see/feel a run of positivity and caught the wave early, which added rocket fuel to those runs higher.

So we’ll just have to see if the bulls jump into the market with no technical signs of hope or not.

It’s mostly emotion out there though so both the good and the bad are possible, for little or no reason.

Have a great weekend, see you Monday.