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

Protests. So the day started just as it normally does – the premarket was slightly higher and yesterday’s dip was looking like the latest and greatest dip for the bulls. Everything played out according to the usual plan until lunch. Equities started to sag around then and pressure picked up around

2 PM.

The market finished modestly lower, giving the bears a TWO DAY WINNING STREAK! That’s unpossible! Capital flow was elevated at 117%.

The last time the S&P fell two sessions in a row, bulls ramped the S&P 20-plus points on the third day. Bears should take note and we shouldn’t rush to pronounce the bull dead.

Anyway, what happened today?

Well the top of the day was around the time President Trump mentioned that the tax reform was going to conference and that they’d perfect it there. Something about keeping all the good stuff and getting rid of the bad. That’s the cue for the lobbyists to get to work with even more egregious carve-outs than already exist in this thing…. But I digress.

So at that point, it looked like this thing was essentially in the bag and the thinking was that buying-the-rumor was done and the street was transitioning into sell-the-news mode. I’m rolling my eyes a little bit because like every Wall Street rule of thumb, 50% of the time it works every time.

But… the run-up has been so widely believed to be because of tax reform, some significant money certainly chased the rumor up and is probably dumping and running…

Later in the day, vocal protestors in the Congressional office building were targeting certain Senator offices to try to swing votes and stop the tax reform bill. This protest coincided with the 2nd leg of today’s intraday selloff. I think that if the protests are big enough and if opposition of the tax reform (as currently drafted) grows/spreads…. This legislation may not be a done deal after all…. Cue a big selloff if/when that happens. Polls show that this legislation is extremely unpopular with mid-fifties disapproval numbers among the public in recent polls. I don’t know how to handicap the eventual passage of this thing but there are some reasons to think that *

maybe

* a few Republican Senators could flip their votes.

We shall see.

Let’s finish with Bitcoin. Its price appreciation has been remarkable and has put the dot-com mania to shame. I don’t know whether it’s justified or not…I have an opinion but I wouldn’t venture to actually speculate on Bitcoin. That said…. If you have 25 minutes to dedicate to learning about blockchain technology and what a distributed ledger is and what it means to do work to mine a cryptocurrency…. I highly recommend watching this.

https://www.youtube.com/watch?v=bBC-nXj3Ng4 I had to watch this twice to *

think

* that I understood it so don’t feel alone if it isn’t clear from the jump. See you

tomorrow

,

-Mike