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

Divergence. Kind of an interesting day today.

  1. S&P futures were up about 15 handles in the premarket. This was widely seen as optimism due to the passage of the tax reform in the Senate.
  2. The Nasdaq 100, S&P 500, Dow Jones Industrial Average all opened up strongly in regular trading and rallied further.
  3. Nasdaq 100 topped almost immediately and was down on the day by 10 AM
  4. S&P 500 topped around 9:45 AM and was down on the day in the last 15 minutes of trading
  5. DJIA topped around 10:10 AM and fell over the day but stayed positive through the close

We saw this last week too: a strong day for equities but tech rolled over first, the S&P eventually followed, the Dow resisted.

It’s a very weird dynamic. Tech has been the leader of the rally. As tech goes, so will go the rest of the market. Tech leading is not the interesting thing today. Tech leading *

with weakness

* in the face of a big broad rally is the story. News today was pretty uninteresting although Brexit negotiation difficulties threw cold water onto the bulls this morning. That *

may

* have been a reason for bears to dig in and fight the rally.

Anywho, today is a big win for the bears. It was a big intraday reversal on big flow (143%) but…

We’ve seen this movie about a hundred times before. If history is our guide,

tomorrow

the bulls will say “hey, a dip!” They will buy buy buy and attempt to rip the shorts heads off.

Are we in store for déjà vu all over again?

Or something different? We shall see.

See you

tomorrow

,

-Mike