The Zigmont Report (Recap for 2/25/19)

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 and do not necessarily represent those of Harvest Volatility Management, LLC.

Rollover, kinda.  President Trump pushed back the March 1st deadline for increased tariffs as he, and the Chinese, said that negotiations were progressing positively.  That sent equities higher and bulls were pushing the tape through all kinds of technical levels this morning.  Capital flow was light at 89%, which is usual for the last few weeks.  Other news items were pretty uninteresting.  The bulls pushed the S&P 500 up through 2800 and we peaked at 2813 after 11 AM.  The market slipped back slowly over the rest of the session.  It wasn’t anything sloppy but it sure looks like the bulls ran out of gas this morning and/or the shorts were squeezed completely out of their positions.  Take a look.

I assume the bulls are laughing all the way to the bank though because if this is the best the bears can do, they don’t have a prayer.

The big event on the horizon is the Fed Chairman’s semi-annual testimony before the Senate tomorrow and the House Financial Services Committee Wednesday.

The market has priced in very favorable Fed behavior for the foreseeable future.  It is highly doubtful that Chairman Powell bursts that bubble…but that is the risk to the markets.  Testimony begins at 10 AM.  Prepared remarks should be standard fare.  The Q&A is where the wildcards could lie.

See you tomorrow.