The Zigmont Report (Daily Market Recap for 8/3/18)

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.

Innocuous.  The nonfarm payrolls data (+157k vs +193k est & +248k prior revised from +213k) was a bit disappointing but the revision was large.  The moving average of job creation is well over 200k per month, which is excellent.  Also, the Toy R Us bankruptcy/closing skewed the numbers….  The point is that the labor market is humming along.

The market didn’t care much at the release however.  This data doesn’t change the Fed’s plan and doesn’t change the market’s expectation for “the plan.”  Right now there’s a 90% chance of a hike in September, that’s up 10%.  There’s a 60% chance of another hike in December.  That’s the same as earlier this week.

So the markets didn’t care about NFP and we were left with the same old, same old equity dynamics.  The bulls did what they like to do and they pushed prices up again.  Flow was light at 91%.

Here’s the verdict on today.  The bulls are back in charge.  The sentiment of the market was in flux for a few days last week and this week and then it returned to its comfort zone.

Maybe the bears can make a play for control of the narrative of the market but they most likely need the help of an outside catalyst to pull it off.  Things have been so quiet, I wonder when they’ll get one.

Have a great weekend, see you Monday,