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
5 for 5. US equity futures were down small before the open and the S&P opened down small as well. The selloff lasted for the morning and we ticked positive from lunch on. Capital flow was about average at 103%. News today was of the trivial variety.
If there’s one vibe building out there, it’s a borderline mania for stocks. Fear of missing out is becoming an investing motivation versus an amusing offhand remark.
The fact that the S&P is up 2.75% already this year has strategists, analysts, and technicians scrambling. The calendar-driven researchers are pointing out that when the S&P goes up more than 2% in the first 5 days of the year, the equity market usually returns 20-plus percent for that year.
There are many other calendar-based return studies that look at other things but spit out incredibly bullish predictions.
I think they’re mostly garbage….but that isn’t what’s important. What’s important is that people are *finding justifications* to get long and those justifications aren’t robust. Any and all reasons to get long are good enough to drive behavior.
I have no ability to predict the end of this rally because I have no feel for the tolerance of the market right now. Optimism is bulletproof and building.
I find this silly. I think the market is way out over its skis. Is it going to come to its senses soon or in 6 months? That’s the rub.
See you tomorrow,