Weekly Note Preview: A 12 Page Treatise Detailing The Market Roadmap For The Remainder of 2022
What follows is an excerpt from this weekend's 283rd Edition of Zenolytics Turning Points. To become a client of Zenolytics Turning Points or to learn more click here. What we are witnessing presently is a classic “wall of worry” for the markets that is so vivid, terrifying and all encompassing that investors forget about all the past examples of markets climbing during periods of extreme anxiety, as investors only understand the “why” part of the equation many months later, when the markets are significantly higher. Yes, the markets are indeed forward looking, which is why the study of price never makes sense to the stringent fundamental investor. Current data can never take into account future events, as investors will have no idea how that data will evolve. Price, however, is essentially the wisdom of the market hivemind or collective intelligence expressing itself numerically. Price becomes especially relevant when it expresses itself in direct contradiction to prevailing wisdom. The more powerful the price move in direct contradiction to the prevailing wisdom, the more relevant the signal. What we saw during July and especially during the last week of July, when everyone expected the market to fall after the Fed announcement and earnings is a very powerful signal if you believe in the power of the collective intelligence of the market. The prevailing psychology of absolute disbelief only means that this market has a long ways to go on the upside before properly shifting minds, as it must do prior to a real reversal. With that said, it will certainly take all of August to perform this task. 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...
Weekly Note Preview: The Truth About EPS Cuts And Market Bottoms; The Great Unwinding To Come; The Current State Of Crypto
What follows is an excerpt from this weekend's 280th Edition of Zenolytics Turning Points. To become a client of Zenolytics Turning Points or to learn more click here. MARKET UPDATE The 100 basis point rate hike narrative lasted approximately two days, allowing the markets to reverse towards mid-day Thursday, closing out the week at their highs. As it stands now, we are looking at a 29% chance of 100 basis point hike on July 27th. At one point Wednesday, it was up near 80%. This should drop further in the coming week, as just this weekend, the Fed's unofficial media mouthpiece, Nick Timiraos of the Wall Street Journal, is out with an article solidifying the fact that the Fed wants to do another 75 basis points at their next meeting. With the uncertainty of a 100 basis point move removed, the markets can now go back to focusing on the following: 1. Inflation is being tamed 2. A recession is likely to be a 2023 story, and if we do get one in this year it will be mild 3. EPS cuts are finally here, creating the necessary ingredients for low earnings hurdles that have a high probability of being exceeded in future quarters 4. The markets are basing after a significant decline, with record wealth destruction 5. Everyone is either in cash, hedged or very lightly allocated, especially to what has been working best over the past decade – Growth. When you take all of these ingredients together, it very simply creates a potentially explosive concoction that likely results in upside that is beyond what most are currently considering possible or likely. 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...
A New Dynamic Emerges After Today’s Events
With the much anticipated CPI number coming in hotter than expected, a new dynamic has developed in the markets that didn't exist before today: We now have a 100 basis point hike in rates at a near 80% probability for the July Fed meeting. This creates a brand new psychological lever between now and the July 27th Fed decision. The market will be at liberty to pull that psychological lever at will over the next nine trading days, until the Fed provides some clarity moving forward. In the meantime, there isn't much happening on the news front. The rest of this week only has financial earnings to provide any sort of catalyst, if you want to call bank earnings that. Next week has Netflix and a few other names reporting, with a bulk of growth names reporting the same week as the FOMC meeting. So we have Thursday and Friday of this week, followed by the entirety of next week for the market to pull the 100 basis psychological lever and with it bring all sorts trepidation, strife and anxiety to an investor class that is already psychologically and emotionally pummeled. At Zenolytics, we reduced long exposure today in anticipation of better buying opportunities ahead prior to the Fed meeting, as we are knee deep in the summer trading months, with low volume and volatility creating opportunities for the bears to pull a surprise raid on bidders, bringing in sudden, sharp weakness at will. The message between now and the July 27th FOMC decision will be a mix of 100 basis points from the Fed, steep recession and earnings weakness. It's a potpourri of angst that is best left alone for the time being. This doesn't change the outlook for the rest of the year at all. We are still going to blow the doors off the upside, once investors realize that a recession will be largely avoided this year and the Fed has done a better than expected job of stomping out inflation. Over the next week and a half or so, we simply have the opportunity for some tactical decisions that have a high probability of enhancing performance. Who am I to disregard such an opportunity? Enjoy your evening. 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...
Weekly Note Preview: Bearish Pessimism Leads To Unexpected Results; Why Market Ambiguity Is A Huge Tailwind; The Strategy For Growth In Q3
What follows is an excerpt from this weekend's 277th Edition of Zenolytics Turning Points. To become a client of Zenolytics Turning Points or to learn more click here. MARKET UPDATE Bearish sentiment remains the single most prominent feature of today's market. You can divide market participants into two classes: 1. Those who think we are going right back down to new lows 2. Those who think we will stop at around 4050 in the S&P and move to new lows This presents a problem for bearish investors as in order to have their wishes fulfilled, there would need to be an amplification of bearish factors leading to further selling pressure from an investor population that has largely offloaded risk to date. How fervently have investors offloaded risk over the past many months? As it turns out, according to the advance decline of the Nasdaq, they have been selling tech shares at a rate we have not seen during this current bull market. This is real one sided pessimism we are seeing that is historic in scope. 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 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,...
