What follows are the topics covered in this weekend's note to subscribers. To become a client of Zenolytics Turning Points or to learn more click here.
The excerpt from last weekend's note is available here.
In this weekend's 11 page note we discuss:
- How the late 90s roadmap applies to the market of 2020
- What to expect from the Nasdaq after this correction
- How risk/reward shifted this past week in a big way
- Nasdaq support/resistance levels
- Gauging sentiment via fund flows
- A new leveraged ETF for aggressive investors
- Portfolio changes after this week's correction
MARKET UPDATE
The market remains on an accelerated schedule. In fact, it's not just accelerated in any normal sense of the word, the market is moving at warp speed in order to arrive at whatever destination it has in mind during 2020.
This is important information in and of itself. The fact that the market is choosing to move at what is an unprecedented pace in price. Without getting too far ahead of myself, typically significantly accelerated moves well into a secular bull market are associated with a top of some significance being in the works at some point in the distant future.
The problem for investors is its impossible to know if that distant future is 3 months, 9 months or 18 months from now. It is also difficult to ascertain the role of liquidity and the unprecedented role of central banks in the markets to determine whether the old rules of naturally accelerating trends leading to blowoff tops down the road applies here.
The last time we faced an accelerated market on par with what we are witnessing presently was the late 90s. In fact, the Nasdaq post 1998 LTCM crisis moved at a faster pace than what we have seen from the Nasdaq in 2020.
The key difference between 1998-2000 and 2020 is that the Fed was on a completely different mission. After adding liquidity to avert a crisis in 1998, the Fed started draining liquidity by steadily increasing the Fed Funds rate during 1999 and 2000.
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