The Zigmont Report (Daily Market Recap for 4/25/18)

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

Not an impressive statement.  The bulls/dip-buyers did their thing today but the rally wasn’t very impressive.  I guess if we look at the intraday rally, about 30 handles, it’s somewhat meaningful but compared to yesterday’s close, it’s sad.

My expectation was that the usual suspects would jump in with both feet and lift offers with gusto.  There was no new meaningful news today to spoil the mood either.  A quiet day with a nice dip in the chart usually ushers in fresh buys and today should’ve been a layup for the dip-buyers.

It didn’t play out that way.  It’s possible that the dip-buyers do their thing tomorrow also.  Maybe they are spreading their behavior out over a couple sessions going forward?  What used to be concentrated into a single session could take more time (possibly).

If true, this suggests to me that the fever that used to consume buyers on down days has subsided.  I think their overall bullishness remains but the fear of missing out and the rush to buy ahead of the other guy is over.

This is a sentiment change and I am speculating.  If I’m right, it suggests that new all-time highs aren’t in the cards (anytime soon) and that *if* the bulls get control of the tape, the climb is going to be slower than in the past.

I don’t think this means the tape is going to drop significantly however.  I think the enthusiasm of the bulls has changed but it hasn’t disappeared.  I think bulls will still cushion the tape if/when it drops.  They just won’t rip it right back in the subsequent sessions.

See you tomorrow,