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
Minor differences. Today was a little more volatile than what we’ve experienced lately but it was quite calm compared to the longer history of US equity markets. Intraday, today was less volatile than ~ 84% of trading days in the last 35 years. Capital flow today was interestingly high at 114%. The market also dropped a little bit today.
And that’s about all we need to know: slightly more volatile, slightly higher volume, slightly down. Minor differences indeed.
The bulls are calling this a consolidation or a healthy pause before the next leg higher. The bears are praying the rally has finally run out of steam…. Although they are wisely staying quiet this time around because they’re worried this is about to be the fiftieth top they’ve mistakenly called.
If there’s going to be an event or catalyst to kick the tape out of this brief stall, it’ll probably be earnings season, which begins October 4th. I think other events, even nonfarm payrolls, are small potatoes at this point. The equity market rally is fueled by a narrative. That narrative has many aspects but the most significant component is that earnings are great/growing.
For the bullish trend to continue, that narrative must be refreshed with the next batch of results. Until then, I think the market is quietly treading water and there’s no signal to divine from the market’s recent behavior.
See you tomorrow,