The Zigmont Report (Daily Market Recap for 2/23/18)

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

Positive Friday.  The morning session was bullish and then the afternoon was bullish.  News and data was light again so we were left with watching the yield curve and looking at the S&P price chart.  Yields dropped again (2 days in a row) and the S&P was below last Friday’s level (and the 50-day moving average) until about the last hour of the day.  That’s music to the dip-buyers’ ears.  Capital flow was very light today at 85%.

There’s not much to say about the day except that quiet days continue to favor the bulls and buyers are more than happy to step in if yields back off.  Short treasuries is supposedly a crowded trade so if those traders gets squeezed, equities might rally strongly in sympathy.

This is all contingent on things staying quiet.  Normally, I’d worry about counting on a quiet stretch in the market but that’s been more common than not in the last few years.

For the moment the bulls are back in charge of the tape and the only thing they are thinking about is how much longer than can get at prices that are lower than two weeks ago.

Have a great weekend, see you Monday