The Zigmont Report (Daily Market Recap for 11/29/17)

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

There’s something happening here and what it is ain’t exactly clear.

First – Capital flow was heavy at 147%.  Lots of money flowed through US markets today.

Second – News today was trivial.

Third – The S&P opened up, rallied to new all-time highs around 10 AM, fell to down 7 handles at the lows and finished down small.

Fourth – The Nasdaq 100 opened down and faded consistently all day.  FAANG stocks were the culprits.

Fifth – Bitcoin set new all-time highs today, broke through 10,000 and then 11,000 and then fell to 9,000!  Bitcoin finished around 9,700, down about 200 from yesterday.

Sixth – The Dow Jones Industrial Average printed an all-time high today and essentially closed there.  This was partly due to strong gains in telecom and financials.

That’s what happened, let’s discuss:

The S&P didn’t move all that much today but it did turn around intraday on *no* news and *heavy* trading.  What the heck is causing so much money to flow through the markets today?

The fact that Nasdaq and FAANG stocks were weak all day is really interesting.  These have been the leaders of the multi-year rally.  FACT: how they go, the rest of the market will go.  The S&P resisted for the first 30 minutes but eventually followed.  The fact that the DJIA resisted the whole day is an anomaly.

Bitcoin… that puzzling cryptocurrency had a *huge* intraday turn and its trading pattern looks a *lot* like the Nasdaq 100 futures today.

But Bitcoin isn’t directly relevant to US equity markets!…… or is it?

In a speculative world (which bears insist we’re in), Bitcoin is the bellwether .  If you like, it’s the canary in the coal mine for risk-on or risk-off.

I have no answers but I guarantee the bears think we just printed *the* top in stocks.  Of course, they’ve predicted about 500 of the last 0 tops, so their track record is garbage.  One day they’ll be correct obviously but I wonder who’ll be paying attention by then.

Here’s my point: today was *very different.*

I don’t know if it’s the end, the beginning of the end, or nothing.  The only thing I can say is that *something* is happening under the hood of US stocks and it has nothing to do with a headline here or there.

There are massive capital flows at work with no news to drive them.  What is going on?

Technicians may be closer to the answer than anyone else, interestingly.

Like I said I have no answer to the big question of the day.  I just want to make sure you are all aware that a significant change occurred.

See you tomorrow,