Eye Off The Ball
Close to two months ago while the S&P 500 was still in the 4500 range, I published a note titled Throw Your 2021-2023 Playbook Out As We Have Entered A New Market Regime In that brief note, I described the misery that would plague investors who actually thought 2022-2023 was anything but a psychological reset driven by hyper aggressive interest rate policy that did not come anywhere close to having the dire outcome most of us expected. In fact, all that 2022-2023 did was to compress two wasted years into a secular bull market trend that is now seeking to unwind, as quickly as possible, the interest rate driven pessimism that has seen investors in a near perpetual state of misallocation, yet to be resolved to this day. There is a lot of work yet to be done in order to correct the ills of the past two years. That work will come in the form of persistent price movement that will continue to deny those who are looking for a retest of attractive levels the satisfaction of a decent entry. Bull markets don't work that way. Being forced to chase stocks is the path of least resistance. Now as the market approaches persistent new highs, investors continue to have their eye off the ball looking for local tops in an attempt to avoid a 5% pullback in the S&P 500 instead of understanding the breakout we just experienced is a beginning, not an end. This is a resumption of a secular bull trend that was only interrupted by an overanxious Fed in the face of deteriorating financial conditions brought on by rampant inflation. The rush to move to new highs in such a persistent manner since the late October low is all investors need to know about the degree of compression that took place in the face of hawkish Federal Reserve policy. Forget everything you think you know about the markets of the past few years. This is a different beast entirely. Zenolytics Turning Points is 400+ 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...
Weekly Note Preview: The Evolution Of Perfect Price Structure In The Major Indices; Investor Embrace Of Pessimism At First Sign Of Trouble; Timing A Short-Term Peak; Catalysts In The Week Ahead; A New Aggressive Bull Position; Crypto Strategy
In this weekend's 409th edition of Turning Points we have an 11 page note discussing the continued perfect price structure taking place in the major indices; investors embracing pessimism at the first sign of danger; timing of a short-term peak; macro and micro catalysts in the week ahead; a new Aggressive Bull portfolio position; crypto strategy for the months ahead. What follows is a brief preview from this weekend's note: In the midst of perpetual doubt brought on by the grief suffered at the hands of sadistic market action from January 2022 all the way until October 2023, the markets have spontaneously put together one of the greatest rallies in history. Despite the markets vehemently expressing to investors that they have suddenly been injected with a sense of vitality and optimism, investors remain skeptical, unable to shake off the trauma suffered in years past. When looking at the 20 day moving average of the equity put/call ratio we see that despite a record setting rally, the appetite for puts at the first sign of distress remains unusually high. In terms of overall investor psychology, not only is it the case that optimism is yet to be found, but there is a distinct sense of dread pervading price action. Markets that have investors feeling especially comfortable do not experience anomalous pessimism spikes in the put/call ratio as we observed just a few weeks ago. In the face of what has become a perpetual cycle of pessimism, the price action continues to tell a different story than the bearishness investors seem to be overly anxious to embrace. To view the entirety of this weekend's note, you can subscribe by clicking here. Zenolytics Turning Points is 400+ 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...
Weekly Note Preview: Targets For The SPX During Earnings Season; A Reversal In Bond Weakness Forthcoming; A Glimmer Of Hope In Small-Caps; A New Name Added To Our Earnings Trade Portfolio
In this weekend's 407th edition of Turning Points we have a 15 page note discussing new highs in the SPX along with target levels to look for during earnings season; When recent weakness in bonds is set to reverse; A glimmer of hope emerging in small-caps; Adding a new name to our Earnings Trade Portfolio. What follows is a brief preview from this weekend's note: MARKET UPDATE The SPX closed at a record high this week, validating the technical data from early December showing that the momentum move over the key red trajectory was indeed a “real move” this time, as opposed to the countless whipsaws investors have experienced over the past couple years. A perfect 3 step process has taken place from the point of approaching resistance up to where we find ourselves today. The legitimacy of this move has been proven, with one single resistance area remaining until acceleration over 5000 takes place, which I expect to occur during Q2. 4900 is a resistance area that needs to watched closely from here. In fact, this is the first area since taking up our long exposure in early December where considering taking off some risk will be appropriate. As I have mentioned previously, this isn't 2022-2023, where it will serve investors well to move to cash positions or short periodically. That ship has definitely sailed. To view the entirety of this weekend's note, you can subscribe by clicking here. Zenolytics Turning Points is 400+ 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....
Weekly Note Preview: What Small-Cap Weakness Means For The Market; The Rotation To Large Cap Growth Is On; Q4 Earnings Setup; The Slow Rolling Nature Of The Market; A Crypto Supercycle
In this weekend's 406th edition of Turning Points we have a 16 page note discussing what small-cap weakness means for the market; Our recent rotation from small-cap to large cap growth; How the markets are setting up for Q4 earning season; The slow rolling nature of the market that will continue to keep investors off balance; A crypto supercycle. What follows is a brief preview from this weekend's note: BTC is the embodiment of the slow rolling nature of an asset class that has had a history of vertical ascents throwing investors off given the paradigm shift in price action. We have multiple consolidations during this uptrend that take months to digest. The natural investor reaction has been and continues to be: BTC must be at a top. We have a gradual ascent that refuses to go vertical. The natural investor reaction has been and continues to be: BTC must be at a top. We have sharp pullbacks every now and then as we had in recent days. The natural investor reaction has been and continues to be: BTC must be at a top. Let's assume for a second that I am right and this slow rolling price action continues for equities and crypto. What does this mean for the bull market in 2024 and beyond? A slow bull market, especially in the face of all the macro and geopolitical anxiety investors have for 2024, will continue to be greeted as alien. The news flow will continue to grow dramatically more dire, especially as we head into elections this year. At the same time, assuming the markets continue their slow pace forward, investor psychology won't shift because it can't. Why can't it? The markets aren't following the vertical ascent playbook so there must be something wrong will be the prevailing thought. Followed very closely by “the geopolitical situation continues to deteriorate, and who knows how the US elections will turn out?” A majority of investors will remain in cash or get in cash at the first sign of trouble as a result. A majority of smart investors will see what the markets are up to, driving the markets persistently higher until after the elections when investors realize that none of the chaos they expected has come to pass. And even if some of it did, the markets didn't really care much, they just kept slow rolling their way forward. This is how early stage resumptions of secular bull markets transpire. Lack of care, followed by disbelief, followed by some interest and then eventually turning into fear of missing out. We are still in the lack of care stage, with...