Weekly Note Preview: 8 Popular Perceptions Currently Being Regarded As Fact That Are Set To Be Challenged In The Weeks and Months Ahead
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. A preview of this weekend's 15 page note follows: A number of thoughts currently being regarded as fact by investors are set to be tested by the market in the weeks and months ahead: 1. This is a bull market 2. QE works 3. Technology is a safe haven in a virus economy 4. Rotation to real economy names is just beginning 5. Downside in the market is limited 6. A year end rally must occur 7. Virus cases do not matter 8. Political division of historic proportions is manageable These are all psychological foundations of the current move up in the markets. This foundation of popular thought serves as a means of seemingly mitigating risk. However, as popular perception comes to be regarded as absolute fact, the very stability of the foundation the market is built on begins to slowly crumble, until risk shows up, often times suddenly and with a significant degree of violence. The potential for a turn down at any point from here into the end of the year can be especially violent because so few are prepared for it. The idea of a significant year end decline is such a foreboding topic that most on Wall Street will not even consider it. To view the entirety of this weekend's note, you can subscribe by clicking here. 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...
Craters Ahead
The first few days of November have been a misdirection event unlike any in recent memory. The stampede of those individuals and institutions who feel underexposed to equities, while nervous bears cover their short positions for fear of new highs leading to a parabolic upside scenario, has caused one the craziest bars you will ever see on a weekly chart. As a very simple rule for understanding price, range expansions are reversal patterns while range contractions are continuation patterns. While there are no rules on Wall Street that are static, understanding the role of expansionary volatility and contractionary volatility at important market turning points is essential. What this week's move equates to is a 500 pound man doing back flips on the edge of a cliff during an ice storm. It's not a question of if he will fall, it's only a matter of when. Given that I have been bearish a majority of the time since the September highs, those highs must be viewed as a major inflection point. The fact that the market has wasted this much energy just to get close to those highs is a significant energy burn that leaves little in the way of new energy to take the market to new highs and beyond. This becomes especially true when you consider all of the event risk that lies ahead. From the elections likely eventually ending up with the Supreme Court, to fiscal policy being in limbo until next year, to an economy that is in desperate need of a functioning government, to the virus spiking, social unrest and so on. The event risk moving into the end of 2020 while the market is doing back flips on a cliff's edge is a potentially lethal combination. The slippage from here will likely be epic in scope when it arrives....and that should be soon. Extreme caution is not only warranted but fully encouraged. Zenolytics now offers Turning Points Market Intelligence 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...