The Next Significant Market Trap Has Been Sprung
The tendency for investors to anchor themselves to bearish outcomes has become a feature of this market since the 2023 lows. During 2022-2023 it was inflation, the Fed, with sprinkles of stagflation thrown in for effect. More recently it has become recession, with shades of irrelevant historical comparisons to past shifts in monetary policy from hawkish to dovish that have caused markets to fall once rate cuts commence. Once again, at its root, the bearish argument relies on recession being imminent, as it has been since 2021. Only this time it comes with a brand new caveat - the Fed dropping rates means it is even closer than it has been all those other years. At its essence, the argument is silly. The market will force investors into realizing this during the weeks ahead, with a series of moves that will force this mentality to be confronted in a manner that will be unpleasant for those who are on the wrong side of the trade. Only then will the markets be allowed to entertain the possibility of the Fed being behind the curve, with recession being imminent, once more, even though the outcome will likely end up being much the same as all previous instances. But that's an October/November story. The path for the remainder of August and most of September is forceful, persuasive and demanding of those who fail to fall in line with the simple bullish ramifications of the long awaited shift in monetary policy. Zenolytics Turning Points is 470+ 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...
Weekly Note Preview: The Future Ramifications Of The Volatility Experienced This Past Week; Market Price Structure; What The Volatility Index Seems To Be Hinting; Significant Allocation Shifts
In this weekend's 468th edition of Turning Points we have a 15 page note discussing the ramifications for the weeks/months ahead of the significant volatility experienced this past week; market price structure; what the volatility index seems to be hinting; significant allocations shifts in Zenolytics Portfolio. What follow is a brief preview from this weekend's note: For all the chaos that was this past week, the SPX closed down 2 points, basically unchanged on the week. However, beneath the surface, the market is very clearly telling investors that we are entering a period of volatility that will be both violent and unpredictable. Whether this volatile period lasts weeks or months remains unclear. What is abundantly clear, however, is that the market is making every effort possible to shake loose as many participants as possible. Just looking at the fundamental picture, whether it is recessionary fears that have you lying curled up in the fetal position, or a tense election season directly ahead, there is no shortage of monsters in the closet, frightening investors out of the market. It doesn't end with an uncertain fundamental backdrop, however. The technical backdrop - in other words price action - has suddenly decided to match the uncertain fundamentals after an extended period of fairly serene trading. There is an abundant amount of information to be gathered during volatile periods in the market. During every large move there are intentions at work that can deliver valuable insight as to what lies ahead. As an example, this past week saw the market expend a significant degree of energy in shaking loose as many investors as possible prior to the SPX delivering its largest one day gain since November 2022 on Thursday. In the Monday, August 5th edition of Turning Points I discussed the market “forcing the issue” for the remainder of the week, following the surprise, out of the blue futures ramp directly following the regular session close. We saw a tremendous amount of force used from Thursday-Friday to basically recalibrate the markets off of an overly-bearish setup that had been weeks in the making. To view the entirety of this weekend's note, you can subscribe by clicking here. Zenolytics Turning Points is 450+ 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...