Buying Window For Equities Is Now Closed As S&P 2910 Becomes Everything
It was around mid-May that Zenolytics pointed to the 2895 level as THE key level to tell whether the markets were headed into a euphoria driven ascent higher or a despondent, panic driven descent lower. In the case of the markets into the second half of May, the despondent, panic driven descent lower won in a somewhat rousing fashion. The trajectory at S&P 500 unleashed mayhem on the markets as it has been prone to doing over the years. The same trajectory that was key to the 2895 level is once again about to come into play at 2910. This trajectory point is a monster, having more than 30 years of history behind it, being responsible for multiple instances of mayhem in the markets for both bulls and bears. In other words, there is a tendency for the markets to amplify volatility off of this geometrically important point. Keeping this in mind, although our view from here on equities continues to be generally bullish, there is some reason for caution moving through this week. A prudent bull should take some profits off the table if they were mindful enough to take advantage of the weakness in the markets exactly as the buying window for equities opened early this past week. As the market approaches the 2910 level, it will, at a very minimum, be a pit stop for the market to recharge its engine. What nobody knows presently is how the market will react to this level. Will the S&P simply consolidate around 2910? Will the S&P not pay any attention to 2910, blasting through it? Will the S&P reverse right off that level, moving dramatically lower? Each scenario has different short to intermediate term ramifications for equities. As we approach this level, it will be the second character test for the market since Monday's bottom. The first being a close for equities at or near the highs for the week, as discussed on Twitter this past Tuesday. Given the dramatic nature of this past week's rally, Zenolytics is expecting, at the very least, a pause at these levels. The buying window for equities is now closed until further notice. 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...
The Profit Taking Bell Is Ringing
As we approach the first critical testing point for the current bull run that was discussed earlier this week at 2910 for the S&P 500 it is time to take a step back and pull some cash off the table. This call doesn't have anything to do with the voracity of this bull run or thoughts of some catastrophic failure in the markets on the horizon. Rather, it has to do with the fact that summers are typically illiquid choppy affairs. Never mind the fact that this summer we have a Twitter happy President, an unpredictable Fed and the potential for surprising economic data in both directions. While it doesn't make for any sustainable downside, what it does create are surprise moves that make what has been the biggest rally of 2019 too good to pass up in terms of ringing the cash register. If you participated in the buying window that opened early this week, don't get too greedy. This is a good spot. 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 sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any...
This Is As Good As It Gets If You Are A Bull On Equities
Forget about the fact that the market just left nearly everyone in the dust with the sudden nature of this week's bottom. Forget about the fact that we have had fund flows out of equities over the past few weeks that rival the financial crisis and Q4 2018. Forget about the fact that everyone has been drinking the trade war kool-aid, not able to look past the rhetoric and faulty analysis that is cemented into the psyche of investors about the effects of a prolonged trade war between China and the U.S. The patterns coming out of this decline, into what is now a full-fledged recovery are some of the best in recent memory. Everything from semiconductors to SaaS to financials looks like they want to grow wings and put on an exhibition of acrobatic flight. All of this is taking place as interest rates have been pummeled by what is continued paranoia about the impending recession boogie man, built on a foundation of Wall Street analytical hysteria that is nearly identical to the faulty analysis that came with the Q4 mini-crash in the markets. Something every investor is going to have to realize is that the long end of the yield curve has become a contrarian indicator. It was always said in years past that bond investors have greater insight into the markets than equities. Those roles have been reversed. Fixed income investors have been perpetually wrong about everything from the prospects of continued rate hikes to what is likely now the prospects of rate cuts along with the numerous recessions that were supposed to happen in each and every quarter going back a few quarters now. The herd like move into fixed income securities has just become one more way of expressing doubt about the voracity of this bull market. It has nothing to do with the prospects for the economy or whatever seemingly sophisticated smoke signals one chooses to see in the distance. So with bond investors once again getting it wrong, driving yields to some utterly ridiculous levels, this makes the earnings yield on the S&P 500 that much more attractive. 2% for 10 years on a treasury note just doesn't cut it with earnings growth at current levels. With that said, investors have once again been led to the empty landscape that is fear of the unseeable and paranoia about the unknowable. The perfect landscape for bulls to stampede throughout the month of June. 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...
The Abundance Of Bearish Sentiment Matters Here
There is nothing static about market analysis whether on a macro or micro level. What works one day can be turned on its head the next. What is brilliant one moment can ruin you the next. Good becomes great when being able to completely disregard what has worked nearly perfectly in the past because it simply doesn't apply to the present. Sentiment indicators are notorious for their failings at important junctures in a market cycle. They can also be worth their weight in gold when utilized properly at select points. Here is a chart of AAII sentiment as it currently stands: Bearish sentiment as it stands presently is close to the lows of December. It's not just this indicator that is suggesting an abundance of pessimism. It's all over the place. Investors have, once again, evacuated the market as if it has contracted the Ebola virus with a deadly investor pandemic on the imminent horizon. Given the shallow nature of the May correction and the ferocity with which the market recently bottomed, the bearish sentiment in the markets acts as a safety net on the downside for the month of June. This will allow the markets to move forward, as they have been doing in recent days, without much in the way of downside volatility. The only way the upside momentum can be broken is in case of a fundamental negative event that breaks the deception mechanism of the market. That fundamental negative event will not be trade war related as the market has already acclimated to this fundamental negative, with a majority of investors ready to react with an instant flip to the bearish side on any negative headline. Witness the failure of the Mexico talks after the market closed yesterday as one recent example. Today we are up. Negative trade news is no longer a viable fundamental hook. The continuing "bearing up" of the investment community in the face of what has been a standard correction within a bull market is the perfect recipe for continued strength or at the very least, no more weakness over the short-term. 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...
S&P Target For The Current Bullish Momentum Coming Into Focus
Monday's bottom is beginning to reveal its importance within the grand scheme of price structure in the markets. Each day of successive strength, moving further away from the lows and the critical support areas that created the lows, intensifies the degree to which those lows become a pillar for strength. While it's still important to observe consistent strength into the end of this week, the market is strongly suggesting that upside momentum has reasserted itself with a definitive target in mind for where the markets are headed over the short-term. While it was the NDX that created the hook for the markets for Monday's low, the S&P 500 should take over from here for upside resistance and what is a fairly reliable target on the upside. With that said, the target for this move during June is 2910 for the S&P 500. This will be the first area of substantial resistance experienced by the markets following this week's low. How the market deals with that level will provide the next slices of valuable data related to where the markets are headed. Whether in the direction of new all-time highs or a retest of the recent lows during summer. Stay...
Here Is Exactly How The News Cycle Is Setting Up To Manipulate Investors Over The Summer
The news cycle is curve fitted to market action. Let me say this again for emphasis: The news cycle is curve fitted to market action. What does this mean exactly? Very simply, the news flow of the day, week or month is tailored to whether the market is up or down. Investors have a tendency to believe that news, whether economic data related, macro related, geopolitical related or politically related is driving prices. This is wrong. It is prices that are driving what you are being made to pay attention to on any given day. The current news cycle is very trade deal, tariff and China heavy. Investors are being setup here to believe that no trade deal means that there is no chance of a sustained bull market. The trap is already set for a conflict between price and the news flow, creating the impending ambush for investors who choose not buy into the market because they believe that a sustainable rally must be predicated upon a trade deal. While it's still too early to tell of the intermediate to long-term voracity of Monday's bottom in the markets, the manner in which it kicked off today just raised the chances of this being a bottom of some significance exponentially. It already has markers of something that is about to leave all those who buy into the negative news cycle wondering why their ability to understand the big words in the Wall Street Journal isn't being rewarded by the market. In the meantime, as the market continues to rally, investors will remain on the sidelines believing that negative news regarding the possibility of a trade deal is going to create sustained downside in equities. It will only be once equities sustain the rally on the upside that the news cycle will suddenly change. Your attention will be slowly taken away from a trade/tariff and China focus into a positive framework that will satiate the intellectual and emotional senses of market participants. The negative news cycle will disappear, only to be replaced by any series of positive highlights that are yet to be determined. The only reason to pay attention to the news cycle is so that an investor can understand what are common beliefs in order to create a thesis about how the market is about to shatter all of those beliefs one by one. 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...
Here Is What To Expect As The Market Tap Dances Through The Rest Of This Week
With Zenolytics downside target for the market hit in as close to a precise time and price manner as possible, here is what to expect for the remainder of this week: The SOX will reassert its leadership role on the upside. Indeed, we have seen what is now three straight days of outperformance for the SOX as highlighted on Twitter repeatedly. The markets will end at or near their highs for the week. This means that the currently rally, while perhaps experiencing some downside volatility mid-week should end the week on the highs. Treasury yields on the ten and thirty will continue their dramatic rise with the ten year yield ending above 2.25%. SaaS names will reassert their leadership role as investors who blindly sold over the past several trading days out of fear for a great market calamity in the offing come stampeding back. Gold will fall as it is on the verge of encountering significant resistance at these levels while moving into a notoriously weak seasonal period. The most resilient names during the May debacle for equities will assert their position as leaders of the new school. Among the top candidates are SNAP and AMD, both of which were recommended buys by Zenolytics in May. 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 sources which we, and our suppliers...
NDX Downside Target Met as Pandemonium Breaks Loose
Zenolytics downside target on the NDX was met and exceeded with this mornings dramatic weakness in tech related names. The type of sloppy behavior we are witnessing with various sector seemingly in a knife fight with one another while major averages are cross eyed with volatility is perfectly standard during important turning points. In fact, the nature of today's volatility only cements the argument that we are at a major turning point in the markets that much further. These types of turning points in the markets offer extremely attractive risk/reward characteristics. As a result, it is incumbent on the market to torture investors through inflicting doubt as to the voracity of their analysis. Moving along the lines of a bullish turnaround looming, the SOX has now had two days in a row of relative strength and is currently up nearly 1% despite the fact that Fangs and software names are experiencing substantial selling today. The buying window for equities opened this morning and will remain open through tomorrow. 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 sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness...
The Buy Window For Equities Opens Monday Morning
With futures indicating an open at 7080 for the NDX, the downside target Zenolytics has been discussing for nearly two weeks now is about to be hit. It's not just that the hook for the market is about to be triggered, however. It is being triggered as both the ten and thirty year yields are hitting significant historical support levels. What has happened to the ten and thirty year treasuries in recent months is that they have turned into safe haven zones without regard for economic fundamentals. In other words, they have become a contrarian, get me into something safe play. The entire yield curve analysis the market was obsessed with in Q4 2018 is playing out again in real time without market participants realizing that treasuries no longer carry the canary in the coal mine attribute they once did in the distant past. As it stands currently, treasuries along the long end of the curve have gone parabolic as investors are clamoring for safety. And then there is this type of activity taking place in money markets. A fear ridden, panicked stampede into a brilliant future of negative real rate investment returns. This level of primordial fear among investors is taking place against a backdrop of significant support coming into play for technology at current levels while interest rates collapsing in recent weeks has led to a very attractive risk/reward proposition for equities versus fixed income yields. As we have now nailed the downside target for the markets as the calendar flips to a new month, with fear running rampant among every pedigree of active investor, it is time to approach the markets from a contrarian perspective, believing that all commonly available information is misinformation. Sellers be damned, this is a significant buying opportunity beginning tomorrow morning. 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...
Safe Haven Status Confirmed For Our Favorite Defensive Sector
A couple weeks ago Zenolytics highlighted Single Family Rental REITs as being the perfect defensive sector in light of the torrential downpour taking place in the equity markets. As a test of our theory, with the S&P 500 down nearly 3% this past week, the two leading names in the sector and the stars of our report were basically unchanged in this week's trading. Not only that, both AMH and INVH look like they are begging for higher prices. It goes without saying that buying a portfolio of homes, fixing them up, renting them out and then rinsing, repeating this process ad infinitum is not a sexy endeavor. It's not SaaS. It's not Ibuying. It's not 5g microchips. But it works when the market sucks. And for the time being, the market does suck. While we are due to a nice bounce here, the fact that a bounce is about to take place doesn't necessarily vaccinate the market against further calamity in the form of excessive, directionless volatility that creates an Exorcist inspired 360 degree rotation to take place for the heads of investors. With that said, if you have sector like single family residential REITs that's treating you well right now, don't think the grass is greener elsewhere. Defensive, boring stocks just may be the way to go throughout the summer. 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...