The Zigmont Report (Recap for 6/13/19)

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.

Dip-buyers still going.  They don’t have the same muscle as last week but they are still flexing and they are reflexively chart-driven.  The news of the day was pretty quiet although two oil tankers (one Japanese owned, the other Norwegian) were attacked in the Gulf of Oman.  The US claims Iran was to blame but the press isn’t sure.  This event affected oil prices but not that much, crude was up about 2%.  Equities didn’t think much of the event though.  The S&P opened up about 10 handles and wandered around all session in a tight range.  Not much volatility nor volume today (82% capital flow).

Also quietly happening on the Street is recession-is-coming research.

Nobody is paying much attention to that.

So what we have here is a failure to communicate.

There’s a very stubborn market segment out there that buys every dip.  For a long time, that group had substantial company and the whole market moved higher in powerful rallies.  Now that group is essentially alone and they are going to be left holding the bag.

I think upside is a fool’s errand at this point and any rally the market sustains will be short-lived.  The financial fact-pattern is changing (to say nothing about the geopolitical) and there’s a population of investors that aren’t paying attention.

It’s not necessarily a time to worry but it is definitely not a time to pretend today is just like January…or anytime in the past 4 years.

See you tomorrow.