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.
Nothing but optimism. T+1, with respect to the FOMC, ushered in further bullishness for global equity markets. Asia climbed, Europe climbed, and we climbed. The S&P 500 opened at record highs, faded about 20 handles through lunch and then got it all back and then some by the close. Capital flow was a bit elevated at 113%. Macro data was uninteresting with some positives and negatives printing this morning, but all of the minor variety. US treasuries rallied on the very short end. The Dollar weakened small. Commodities rallied strongly thanks to crude and precious metals. The oil move was mostly cause by Iran shooting down a US drone and Trump’s subsequent comments, which were nondescript but threatening.
Anyway, the point is that the bulls have re-established their old trend and the reflexive dip-buyers have yet another I-told-ya-so victory in their back pocket. I think it’s a dangerous behavior and it’s only getting further conditioned into a larger and larger proportion of investors.
Of course, that kind of risk is off in the future. Right now the investing world is a rosy place and expanding multiples are the result. Valuation hasn’t been a true concern to the market since December and it’s not about to resurface now. As such, the bears are AWOL and there’s no group out there to resist the upside. The momentum game is afoot too and with today’s all-time highs on the chart…the chart becomes the justification for further upside.
We are breaking out and the bull market continues. That’s the story and that’s the most influential component to sentiment.
So sentiment is solidly optimistic and there’s little chance it changes due to whimsy. I don’t know what will dent it other than materially bad news. It doesn’t look like bad news is likely either.
See you tomorrow. -Mike
