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
The same thing every day.
What did I say yesterday? Well ditto today.
There’s nothing materially new or different in the markets as the days roll along. That being said, the tape climbs slowly and steadily.
Is this a good thing? I don’t know. Does this make sense? It does make *some* sense. The news headlines aren’t shaking up the world so quiet markets should coincide with a quiet world.
The big issue with the quiet markets is that they are *so* quiet. The volatility of markets is so low that it raises a lot of eyebrows. Focusing on US equities for the moment, we are experiencing the longest, calmest stretch of activity – ever.
Does that make sense? One can make cases for yes and no obviously but the yes case strikes me as quite a stretch.
Also complicating things is the strong trend higher. It’s one thing for US equities to go up and little and down a little and travel nowhere over some period of time. What we’re experiencing is up a little, down a little once in a blue moon, and we’ve travelled much higher over every time horizon. Is that right or wrong? I don’t know… but it’s unprecedented and that’s the weird part.
Here are three pictures of the S&P 500. One is a 5 year, one is a 1 year, one is a 30 day. The self-similarity is remarkable. The bullish trends are one component. The lack of noise is the other.
I don’t know what this means. It could be meaningless coincidence. It could be a sign of a crowded trade. It could be anything in between.
All I know is that it is bizarre. In a quiet market, bizarre is worth pointing out.
See you tomorrow,