They Are All So Quick To Abandon Ship July 2023 Edition
In November of 2022 as investors were fortifying their concrete bunkers while buying 10 gallon buckets of powdered creamy chicken flavored rice awaiting the end of the world, I put out a note titled They Are All So Quick To Abandon Ship. At the time, this was a plea to investors to screw their heads back on straight, not falling victim to the bearish psychosis that had become endemic. Now here we are some 600 SPX points higher, and while investor sentiment is no longer suicidal, they are still So Quick To Abandon Ship. In this weekend's 361st edition of Zenolytics Turning Points, I outlined the case for taking our exposure back up to near 100% invested during the week ahead, after averaging this past week at roughly 50% invested, our lowest exposure in some weeks. Along with analysis of two new positions and the case for adding to our largest position, the following excerpt from this weekend's note cannot emphasized enough: Will a market that went so out of its way to deceive everyone into year end 2022 all the way through part of the first half of this year, suddenly turn into a charity case, rendering all of its efforts null and void? When looking back at 2022 – early 2023 some years from now, we will confidently be able to say that it was one of the most deceptive market moves you will find during a secular bull market. Against this frame of reference, knowing what we know about the 100 year history of secular bull markets as I've presented in my recent notes, while also understanding that the degree of effort the market puts into a deceptive result is directly proportional to the degree of output yielded as a result of the deceptive effort, a significant pullback for the rest of 2023 becomes a very low probability event. It's not a matter of analyzing a market based on recent performance, then coming to the conclusion that being the market has moved up so far in so short a period a pullback must be due. Rather, it is a matter of analyzing a market based on context and effort. The effort expended to gather the hearts and minds of investors into expecting a certain outcome, tells you more about the markets future intentions than most anything else. Additionally, understanding the context of where the market is in its largest cycle, tells you the timing of the move. 2022 was such a monstrous anomaly that every investor should do themselves the favor of understanding that the swing of the pendulum forward will be of equal if not...
Weekly Note Preview: A Discussion Of Exactly Where We Are In the Current Secular Bull Market Cycle And What It Means For Investors During The Months Ahead
In this weekend's 359th edition of Turning Points we have a an 11 page note discussing exactly where we are in the current long-term secular bull market cycle, how previous secular bull and bear markets tell us what to expect with the current run, and how to best invest for what is ahead. What follows is a brief preview from this weekend's note: Scenario 2 is coming to pass. This means that given the fact that an anomalous decline occurred in 2022 during a liquidity filled monetary environment as we approach the middle stages of a secular bull market, the makeup trade that occurs is going to be formidable, to say the least. Everything is at the markets back from here: We have the middle stage (acceleration stage) of a secular bull. We have a deceptive enough decline that nearly everyone got shaken out. We have rampant liquidity remaining in the economic system looking for a home. We have all-time highs in the major indices that are yet to be exceeded, acting as both a a point of attraction and upside catapult once they are exceeded. We have psychology that has completely shifted from where it was 18 months ago at the market peak. We have a Fed with an ever diminishing role in the market. We have an anomalous decline in 2022 that the markets will violently makeup for. We have a theme in AI that will function as the fundamental narrative to drive prices. The fact that we have the AI revolution occurring as we enter the middle stages of the secular bull market also lines up well with the psychology as we entered the middle stages of the 1982-2000 secular bull market, with the internet boom occurring during the middle to late stages. Whether technological revolutions occurring as price begins to truly heat up is a symptom of speculation or a feature of the cycle at work is up for debate. To view the entirety of this weekend's note, you can subscribe by clicking here. Zenolytics Turning Points is 300+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. 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...
The Current State Of The Markets
In this weekend's 357th edition of Zenolytics Turning Points I went over the ultra long-term cycles that are ultimately dictating the moves that have confused, bewildered and angered so many investors and traders in 2023, along with the best ways to take advantage of the stage of the cycle we currently find ourselves in. At its absolute essence, market prices dictate fundamentals, not the other way around. George Soros calls it the Theory Of Reflexivity, other investors have given it different names. However, it is the most important reality that investors consistently refuse to face to their own detriment. Coming into 2023, there wasn't a single fundamental indicator that would have told you the Nasdaq during the first half of the year would put in one of its best performances ever. What did tell you of this outcome was a mix of elements that have nothing to do with fundamentals, and everything to do with psychology, price structure and market cycles. This from my tweet on December 20th of last year as everyone thought we would be in a recession, with the SPX at 3000 by now. Here we are halfway through 2023 with investors indeed being surprised by the upside that has taken place. The fact of the matter is that upside of this nature doesn't simply take place to allow the army of bearish investors that exist an opportune entry point to get short or in cash. Upside of this nature in the face of every conceivable fundamental headwind possible over the past 6 months takes place because the markets are looking at a point in time and a future reality that few can grasp at this moment. The absolute fundamental construct of what exists 9-12 months ahead is impossible to assess. However, what is possible is to properly judge price, allowing it to guide allocation decisions without bias. Price continues to dictate increasing allocations as we have been steadily executing in recent weeks, with a new allocation taking place as we start the week ahead. Looking for continued upside as the markets continue to steadily climb away from the majority that never saw this coming. Act accordingly. Zenolytics Turning Points is 300+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. 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 Bullish Technical Data Point That Few Are Discussing After Today
VIX annihilated investors from morning until close, reversing nearly all of its gains throughout the trading day. Yields look climactic, setting up for a short-term reversal back down, at the very least. Equities are holding their former key resistance that is now acting as support. In the midst of this, perhaps distracted by memories of past follies, there is an extremely bullish technical data point that absolutely nobody is discussing after today: Looking at today's series of events, we now know that yields can surge, the VIX can explode, while equities solidly hold onto key support levels that formerly acted as resistance. While most everyone else is panic stricken at the first sign of weakness, walk into tomorrow's job report confidently knowing that today's market already told you how tomorrow will fare. This market is carving out a new base from which the SPX will likely move up to 4650-4700. The fervent apologists, chronic pessimists and dogged doubters amongst us are, once again, focused on the wrong price levels and data. We will be looking to increase our positioning, as we have been for some weeks now, moving into a leveraged long position by early next week. This bull market is a different beast. Treat it as such. Zenolytics Turning Points is 300+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. 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,...
On The Final Trading Day of June, This Happened….
That final bar of the final day for the final month of the third quarter. That bar wasn't a coincidence. The market didn't gap up above key resistance, essentially forming a thrust, turning former resistance into support on the final day of June and the final day of Q2 on accident. The market didn't end the day, week, month, quarter and year to date 2023 on the final day of Q2 at its highs because we have tough times ahead. Everything that you just witnessed was purposeful and consequential. There are no accidents in the markets. There is intent and purpose behind everything. Innocuous and inconspicuous bullish price formations have been with us for this entire move up, while the markets worked their slight of hand, focusing everyone's attention on inflation, the Fed, Ukraine, China, recession and so on. None of this was an accident. Price was speaking to investors the entire way up. What is separating the winners from the losers in 2023 are those who chose to listen to price and those who chose to ignore it. It really is that simple. And yet again, price has spoken investors on Friday, June 30th. Those who continue to listen will be the ones who walk away with the greatest profits come July 31st. Rinse and repeat. Horns up. Paws down. Zenolytics Turning Points is 300+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. 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...