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.

Pie in the sky. Last week was a big swing in sentiment and it continued through to today. The S&P opened about 15 handles higher and marched to the noon intraday high, where it was +30 handles! This happened because of the end of the Mexican/US tariff standoff and widespread bullish vibes. The tape faded slowly from there and the bulls ended up with another nice win but not a back-breaker. Flow was about normal at 97%.

The emotional pendulum has now swung too far into optimism. The dip-buyers reflexively jumped into the market over the last week and forced quite a V-shaped mark into the tape. The S&P is up 5 consecutive sessions now and the reason for the huge rally is…. The Fed is going to ease…because the US economy is weakening.

Well that’s not bullish if you ask me but no one is asking so we’ll just move along.

The fundamental picture today is not substantially different from last Monday. There’s a difference for sure but it is not such a positive for stocks that we should be expanding multiples.

Returning to the emotions of investors, two weeks ago was a pretty bleak moment. Last week was a response but the market got carried away. We’re now back in the thick of bull market euphoria. It’s an overreaction and it will fade.

We’ll just have to see when it kicks in.

See you tomorrow. -Mike