The Zigmont Report (Daily Market Recap for 7/19/18)

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

Little breather.  The US equity market was quiet…again.  Flow was almost normal at 97%.  Overseas markets were down small and our futures were down small in sympathy.  Despite the dominance of dip-buyers lately, the market didn’t convert the down morning into an up afternoon.  It looks like the bulls took a break.  They’ve controlled the tape for most of the recent past but they didn’t flex their muscles today.

It’s unclear why bulls eased up off the gas.  I speculate that we’re waiting on the next batch of earnings from the market leaders before there’s a new push (in either direction).

Netflix was supposed to spearhead things.  It didn’t, but it’s disappointment didn’t matter either.

Next in line is Microsoft (announces tonight).

After that is Alphabet/Google (after Monday’s close).

We’re in earnings season and since market leadership has become concentrated in the FANG names (and other growth stocks), it makes sense to me that investors are waiting on news from the key stocks before they rip things higher….  The bears are outgunned at the moment also, so they can’t force anything on no news days… the dip-buyers just come in and roll them.  So even they need news from the market leaders.  They are obviously hoping for disappointments but even those might not be enough to back the bulls off their buy buttons.

Anywho, the bottom line to today’s action was very unremarkable.  The tape fell but it wasn’t much and it doesn’t have a deeper meaning.

See you tomorrow,

PS. MSFT beat across the board.  Stock is down small in the after-market.