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
Almost summer. Today was quiet. News was minor. Capital flow of 77% was very light, even when compared to the past week. Stock price movement was pretty insignificant. The bulls scored the official win and put the cherry on top of a helluva week. The S&P climbed more than 2% this week. The formerly sidelined dip-buyers may be getting the itch to jump in and do their thing.
The lack of major headlines and economic catalysts in the last few weeks as well as over the next few weeks leaves the US equity market in a chart-reading food fight. Everybody is watching their favorite technical indicators, speculating on the next move of the market.
Here’s the 1 year chart of the S&P. The climb above the major moving averages has excited a lot of chart-followers. I don’t think they have a lot of capital to continue to push things higher but we’ll just have to see next week.
The bottom line for the week is that we’re swimming in a catalyst-free moment in time. The bulls used to own these moments but they lost domination of the quiet times around late January. It looks like they’re trying to reclaim things. They haven’t used much capital to do that though so I wonder how much force they can exert.
A major catalyst will change everything but until that happens everything looks/feels very technical.
Have a great weekend, see you Monday,