SOX 1330 Is A Hook For All Of Tech
Since Broadcom destroyed whatever hopes and dreams semiconductor bulls had last week with a cut to guidance and weak revenue numbers, the SOX has declined nearly 6% from its peak. The pain, however, may not be over for SOX bulls. In fact, if one is bullish on the SOX it may be better for the index to reset by touching 1330 before any semblance of a recovery effort is made. 1330 on the SOX should become a hook for the entire tech sector on a positive reversal off this mark. Of course, with the Fed meeting on the horizon, the destiny of investors will largely be in the hands of grey haired academics who think that being dynamic and adaptable is having oatmeal for lunch instead of split pea soup. In any case, while there will be excessive volatility around some key technical points this week, the fact that both the S&P 500 and the SOX are sitting near key points will make navigating the markets that much easier following the typical post-Fed mayhem in the markets. At the very least, investors should take heart in this fact. Zenolytics remains convinced that the current weakness in the SOX will be a buying opportunity for the best and brightest names in the sector. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from...
What Just Happened To AMD and When Does It Deserve Another Look?
A little timeline before we get to the entree. Zenolytics originally suggested investors take a look at AMD in mid-May in a note titled Zenolytics Goes Bullish On AMD, citing the upcoming Computex Conference as an immediate catalyst to the stock price. AMD price at the time: $27.50 The next note titled AMD New Product Announcement Sets Stage For $34 Stock Price came out shortly after the Computex Conference delivered the expected melodious message to investors with analysts tripping over themselves to deliver backup vocals to the CEO who announced a number of new product offerings that lit a fire under the stock price. AMD price at the time: $29 This past Monday AMD hit a high of $34.30. A high that remains in place to this day, hitting our $34 price target almost exactly causing this Tweet to be delivered in a timely manner. Since Monday, June 10th AMD has declined 11.50% as the semiconductor sector has unraveled mostly due to Broadcom's woes, which Zenolytics believes are completely isolated in nature. The decline in AMD, completely based on sympathetic algorithms that only observe "semiconductors bad" and decide to blanket the entire sector with sells, should be taken advantage of in the case of AMD and likely a handful of other names. There is a turning point coming for AMD that will continue to deliver separation between the company and the rest of the semiconductor sector. AMD is not Broadcom. AMD is not Intel. AMD is a company that has evolved into a manufacturer with top flight products aimed at high growth industries such as gaming and mobile all coming in at attractive price points. Incumbents like Intel are beginning to fall behind in the product race, allowing AMD a substantial window to create earnings momentum over the next few quarters. While it is likely still early to reinitiate a position in AMD, the time is quickly approaching. Eyes wide open. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is...
Past Week In Review: Market Is Talking, Who Is Listening?
Everything that happened this past week emanates from the fact that the 2910 did its job in capping the market. Last Sunday, Zenolytics put out a note saying that the buying window for equities was now closed, as 2910 was everything. The high on Tuesday for the week was 2910. Even more significant, the high happened along the lines of a perfect time from a cycle basis. The simple fact that the markets paused exactly where they should on the day that they should isn't enough, however. What we need to know is how the markets react to such symmetry. From observing the market after the touch of 2910, there was an undercurrent of buying that was very obvious. The market wanted to rollover multiple times throughout the week and had every reason to do so given both technical and fundamental developments. However, every time the market started gathering some downside momentum, a wave of buying swept over the market like a cool breeze, calming those who had their fingers on the sell button. This is significant in that it tells of one thing specifically: There are too many bears remaining in the market for it to move down without a severe, surprise fundamental setback. The cool breeze of buying that kept sweeping over the market all week tells of: A majority of sellers who wanted out of the market already being removed from the picture New buyers steadily moving in A steady wave of short covering, following a painful start to June for the bears As we move into a key Fed meeting this week, there are multiple reasons for bears to continue their short covering campaign until the Fed announces their decision. The threat of a surprise 50 basis point cut will likely start ringing throughout the financial media on Monday morning prompting some panic among the bearish camp. Geopolitical instability couldn't take the market down this past week. Semiconductors failing due to Broadcom's woes barely made a dent. A very serious technical point of resistance simply resulted in a sideways market. All of these facts are the equivalent of the market shouting that it wants to test 2910 again early in the week. Only this time around, 2910 will likely fall, with the advantage moving to the bull side until we see what the Fed has to say. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not...
The Whispering Of Valuable Data Pieces
For all intents and purposes, the market should be down this week from both a technical and fundamental perspective. Let's start with technical first. Zenolytics has been laser focused on the 2910 level since this rally started. The high for this week on the S&P 500 was 2910, a level that initially looked as though it would stir up some financial horror stories, at least for a few days. The fundamental picture should have only added a shot of steroids to the bearish case. Just last night, Broadcom basically came out and said they are giving up on the second half of the year. And then we have what looks like war drums beating in the Persian Gulf, with an eye on Iran this time around. Even gold is catching onto how dangerous things are geopolitically, as the safe haven metal is making new highs this week. Yet here we are. It's Friday and the S&P has essentially gone sideways this week, in what is certainly a resounding win for the bulls. Bear should have been able to cause something along the lines of a 1% decline this week. Flaccidity seems to be running rampant in fur ball camp since early June. All of these failures by the bearish camp in the face of just a few of the many negative tailwinds this week are whispering valuable pieces of data to investors who choose to listen. The markets are much stronger than most of us think, reinforced by ultra-low interest rates and bearish sentiment that is filling the stadium well beyond capacity. At the very least we have a test of 2910 coming on the S&P next week. Depending on the reaction to that level, Zenolytics can accurately gauge what remains in store for June. Stay tuned. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that...
Here Is Why Investors Have To Avoid The Narrative On Semis Starting Tomorrow
Broadcom (AVGO) came out with earnings after the close tonight, disappointing on revenues and slashing guidance. The stock was down some 7% afterhours. Of course, the rest of the semi stocks will simply tag along tomorrow with the narrative of a weak second half creating an army of mind-controlled robotic bears, prepared to sell anything semi related that ticks into the green. Then you will have the technical hooligans jumping onboard talking about how the SOX is now putting in the dreaded head and shoulders pattern, which it indeed will be upon a weak close tomorrow. Already, here is some of the bearish commentary from Seeking Alpha tonight about AVGO's earnings warning: It seems as though the general trading population is now completely sure of a second half slowdown, with one fellow experiencing incontinence of saliva while fantasizing about an impending 30% discount to share price. While all of this makes for a wonderful session of pseudo-intellectual debate about various micro, macro and technical factors, its primarily theater and should be treated as such. Earnings warnings may slowdown an uptrend, while creating disruption to price. However, earnings warnings will never create a lasting market top of significance after a large run in any sector. That is simply too much bell ringing, allowing the armies of mindless, financial media obsessed bears the opportunity to simply ring the cash register because the headlines are telling them to. Markets are far too counter-intuitive in nature to allow that. With this said, AVGO very simply isn't going to ring a bell at the top of the semi cycle. It's going to be a far more complicated, dynamic and scintillating process. And it's my thesis that AVGO, far from being a canary in the coalmine for the semiconductor sector, is simply a lonely outlier that will be completely forgotten about by Tuesday of next week. Of course, once an opportunity is spotted in semiconductors moving forward, Zenolytics will pounce with an update of some degree or fashion. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered,...
The Noble Art Of Simplicity
There are years where an investor can shift between sectors and strategies, constantly rotating between what is in favor and out of far. Then there are years, such as 2019 to this point, where investors are best served to stick to what has been working. What has been working in 2019 so far? SaaS Homebuilders Publicly listed private equity names Select media companies, including social media All of which has been buoyed by perpetually lower interest rates, allowing for all of the above listed businesses to function more efficiently. There are businesses during every single economic cycle involving all variations of interest rates that thrive off of different points in the rate cycle. The above listed names happen to do very well at this point in the rate cycle. Of course, it's not just rates that make these sectors attractive, their businesses are levered to trends within the macro-economy that push their business models along the path of least resistance. 2019 may be defined as a year when what has been working will continue to work. This means that being fancy and smart will likely get you in trouble. Simple trend following strategies that buy into the general consensus have worked and will continue working. While there will be chop, such as what we have experienced recently in the markets, that chop should be approached opportunistically, not to get involved with out of favor sectors that haven't done much in 2019, but rather to allocate into what simply has been working. That's what Zenolytics has been doing with recent recommendations to get into Disney last week to subscribers, an underappreciated SaaS play that can be dominant in the years ahead and shares of SNAP last month with a price target in the 20s, as the company is just beginning to click. There will be a time for fancy. Right now isn't it. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction...
The Enigma That Is Gold In 2019
Late last year, Zenolytics put out an extensive note titled, Making The Case For Gold. Much of what was discussed in that piece remains highly relevant, if not more relevant today. However, the entire thesis behind gold needs two catalysts in order for the engine to function correctly: A U.S. Dollar that, at the very least, hints at some weakness Some type of event that impairs the risk appetite of investors The entire dilemma faced by gold investors presently can be summed up by neither of the aforementioned factors buoying the gold market. As a result, we have a hot and cold market that is more trendless than anything. This doesn't take away from the fact that over the long-term there may not be a better risk/reward play than gold after years of going absolutely nowhere. As far as the long-term price trend is concerned, gold is likely at a similar spot on a risk/reward basis as it was in 1999/2000. The "paranoid gold bugs" that have tattoos of Jim Rickards on their pelvis will eventually be vindicated, as the upside will more than likely be parabolic in fashion once it begins. The only question is when? And simply sitting in an asset waiting for that when is a lot more difficult than it sounds. Especially when you have all types of cool asset classes like ride sharing, SaaS, 5g semiconductors, social media etc. to park your capital in. After all, it is much more fun to talk about your shares of Snapchat at a party than your conviction about the macro-economic benefits of having gold in a portfolio. With that said, Zenolytics is taking an active viewership role in gold over the near-term. There are some appealing miners out there that may be worth initiating on the long side, in fact. At the very least, gold certainly fulfills its role as an overall portfolio insurance policy selling at a very attractive premium given current prices. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption...
Zooming Out For A Moment
In the midst of dissecting the short-term swings in the market, it's easy to forget to zoom out in order to properly interpret the wider message that the markets are sending through their behavior. In what is not too different a practice as a clinical psychologist who sees patients go through various stages of emotion, market observers must look beneath the layers of obvious, overt behavior, into the deeper message that the behavior is sending. Over the past few weeks, the markets have become astoundingly symmetrical in their behavior. What does this mean exactly? The markets are simply following the technical markers in the ground to absolute precision. Road signs dictate the direction of the mindless driver. But that's not good enough. So what if the markets are following technical markers. What's the overall message? Here is the answer: When markets behave in a precise symmetrical manner it often means that they are without any type of fundamental foundation with which to put together a substantive, quality move. They are simply directionless, floating about waiting for something to assist in giving it a push to find an ultimate direction. After the mental decapitation investors have faced during the first half of this year as a result of a schizophrenic news flow, it's no wonder the markets have basically gone limp. Everyone is tired. And that's very simply where the markets are presently. Zenolytics has been talking about a sideways, choppy summer for sometime now. The market isn't telling investors anything to make them believe that this won't be the case. In fact, it's reiterating the fact that sideways and choppy is where it's comfortable right now. It will be a traders dream and an investors nightmare. If you're a trader, sharpen your tools and grab a cold brew. If you're an investor, play checkers at the park until September. That's the bottom line. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any...
Put A Fork In It: Market Just Gave Away Its Hand
Those of you who have been following the current story line of the market as narrated by Zenolytics have become very familiar with our obsession with the 2910 level. In fact, the 2910 level was being discussed as the ultimate upside target for this rally one hundred S&P 500 points ago on June 5th, in a posting titled S&P 500 Target For The Current Bullish Momentum Coming Into Focus. Point being that S&P 500 2910 has been in the crosshairs since this rally kicked off last week. As the market decided it would fulfill whatever nefarious desires it has here via a gap up this morning to further trap those Johnny Come Lately Bulls who missed last week's bottom, the 2910 level on the S&P 500 became the high for today. More than likely, this will be the high for this week, as well. Buying when it feels good to buy never works. Buying this morning felt good after the perceived safety of what everyone now realizes was a bottom last week after endless headlines of " best week of the year" are being plastered all over the financial news media. Not good enough. While we are not experiencing outright greed here, over the very short-term there is a bit of FOMO taking place in equities. The markets will resolve this through the forced evacuation of long positions via a death defying dance further made vibrant through a negative news cycle that will be curve fitted to the weakness we experience this week. This forced evacuation will in all likelihood occupy the reminder of this week. If you're looking to buy, the buy window may reopen again next week. For the time being, short positions or sidelines remain the most prudent avenue for the short-term minded among us. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of...
Already The Reaction To Resistance Today Is Telling
Back while most others were still wondering whether the markets had indeed bottomed, Zenolytics was looking ahead to this moment by issuing the upside target that the S&P 500 would naturally gravitate to at 2910. The high for today in the S&P was 2905, which qualifies as a hit of our upside target for this move off of Monday's bottom. Already, the market is reacting to this generational point of resistance with over 30 years of promoting chaos across financial markets by reversing off of the highs over the past couple of hours. What does this mean? For this week it means everything. When markets are paying attention to geometric points of resistance they tell investors by reacting through an expansion in volatility. Expansions in volatility include reversals off of these points that create ugly reversal patterns in the market. As a result of today's revelation by the market that it is indeed paying attention to this resistance point, the probability of either today or tomorrow being a high for this week increases exponentially. Generally, this is a terrible place to be taking on long exposure. If anything, it is a point where profits should be taken on names like AMD, which hit our price target discussed a month ago today. It's beginning to seem as though this week and quite probably next week will be a wash for bulls, while being advantageous for the bearish camp. Zenolytics continues to see June as being highly favorable to the bulls with what should be a substantial rally taking place during the last week of June to end Q2. Between now and the last week of Q2, expect confusion, dissuasion and befuddlement to...