The Zigmont Report (Daily Market Recap for 8/16/18)

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.

Yo-yo!  So there are talks that China and the US are going to resume tariff talks.  That’s a lot of talking.  This is perceived as a positive and that the trade issues/frictions may go away soon.  That news spurred the risk-on macro trade and probably encouraged the dip-buyers to jump in yet again.  I’m sure shorts covered like maniacs as well.  Capital flow was a respectable 96%.  Today looks and feels like another knee-jerk emotional reaction to the prior day’s move.

If it continues, we’ll be going down again tomorrow.

Where are we in the Turkey crisis?  That’s the question that I think matters most.  The Turkish stock market dropped 3.5% today and the Lira strengthened 2%.  That’s not a clear signal one way or the other.

From a 50,000 foot standpoint, we are in the same spot as yesterday, as Tuesday, as Monday, etc.

The situation is a bit dicey, the volatility is higher, the future is more cloudy and we don’t really know anything except that Turkey just went down hard.

I wouldn’t trust a move up or down in the market as far as I could throw a piano.

The next leg in the next trend is TBD.

See you tomorrow,