Past Week In Review: The Winds, They Are A Changing
There are certain weeks where you just feel the market Earth shifting beneath your feet. This was one of those weeks. Blame it on the Fed. Blame it on Dollar. Blame it on gold. Blame it on interest rates. Whatever it was that triggered the macro earthquake we felt this week looks very real and very persistent. The only question is what shape does the landscape take from here for all major assets classes? The Fed - They are now officially in an accommodating stance. Whether they are beholden to the bond market or to the President we will never know. What we do know is that the 180 they have made has been legendary in scope. The message of inflation or die is very clear. Bringing me to the next topic of conversation... The US Dollar - The Fed's message of inflate or die means death to the Dollar long-term. It took quite awhile for the Fed's message of inflation before all other considerations to resonate in the currency markets. However, with this week's significant technical breakdown in the Dollar, it seems that traders are finally getting it. King Dollar needs to come down in value, perhaps markedly so. A good segue into our next point of discussion.... Gold - The yellow metal broke out in a big way this week. Everything went and it went hard on the upside. There isn't anything to be observed in the breakout in gold or any of the gold miner related indices that says this is not a legitimate acceleration of trend to the upside that will bring with it new heights of valuation. With the Dollar being sacrificed by a Fed being led by the inflate or die mandate, it's simply a matter of how high will gold fly. Rates - Just as everyone was convinced rates were going perpetually higher (they went much lower) this time last year, there is a case to be made that everyone is wrong once again about rates. Back to the inflate or die mandate out of the Fed. While everyone believes that since economic activity slowing equates to lower rates, most market participants are not well versed on stagflationary economic dynamics. There is a case to be made for the next bout of QE, in whatever form it comes, resulting in much higher interest rates as deficits are in no position to support increasingly bloated governmental balance sheets. This means the Dollar is sacrificed, inflation soars and rates follow along with it. While investors were busy admiring the Slack IPO, debating U.S. policy towards Iran and wondering when semiconductor stocks would turnaround, the...
As Investors Are Set To Do The Happy Dance Above S&P 3000, Here Is The Reality Of That Level
Rounds numbers have an odd appeal among investors. Every major round number that is broken on the upside or downside is highlighted in flashing headlines and talked about among media pundits who attempt to create a meaning where there usually is none. The next major round number that is due for some attention among market enthusiasts is the 3,000 level on the S&P. Since Zenolytics believes a break above the 3,000 level will happen in the next couple of trading days, it's time to sit down and discuss the ramifications of such a move. While moving over 3,000 on the S&P will be celebrated by most every bullish observer, the reality of this level is it throws the market into a twisting, torrential downpour of significant historical resistance. This is the 2910 level on Barry Bonds era steroids with cocaine mixed in for good measure. This isn't just a simple round number exercise. In the case of S&P 3,000 it has significant technical meaning that has nothing to do with the round number. What does that mean? It means that once we get over this level, barring some type of surprise rate cut that allows the market to pierce the resistance like a Russian rocket, equities are going to have a lot of work to do. One of the consistent themes Zenolytics has been jumping on the conference room table about for the past few months is the choppy nature of summer trading that is to come. The S&P 3,000 level will only accentuate the choppiness with headline risk that will continue to astound in its propensity for the audacious. While this may be a case of looking ahead too far being that as of this moment there is nothing to be but bullish with the buying window that opened this week and the resulting blue skies until 3,000, it bears a warning in advance given the significance of the resistance at hand. In what shouldn't be a surprise to any observer of this site, the ultimate goal of this note is to remind you to prepare to zig while others are zagging. The happy dance coming at the 3,000 level will embody this concept entirely. Zenolytics now offers Turning Points and ETF Pro 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....
The Buying Window For Equities Reopens As Bidders Lurk
In Zenolytics running obsession with pointing out the perfect windows available to investors for buying and selling equities, a new buying window has opened this afternoon. We are now in the second day of a surprisingly calm effort by the S&P to overtake what has been a historically treacherous trajectory point. As it stands now, this trajectory with a history of so much malfeasance towards the market is sitting at 2910. The peculiarity of the markets reaction to this trajectory since yesterday should not be overlooked by investors. The markets had a substantial window here post-FOMC to put together some massive volatility off of this key trajectory point. Instead, equities are simply drifting around as if half of Wall Street has already taken off for summer vacation. This type of continued contraction of volatility runs contrary to the character of this important technical point. As a result, investors can gain key data into the markets character here. Very simply, there are bidders lurking. Their bids are consistent and deep. The fact that the market aren't be allowed any volatility whatsoever pre-FOMC was fine. However, post-FOMC? In the midst of such a historically important point of abstract volatility? This is simply downright bullish behavior for a market that is sitting above such an important technical point. The volatility will come. However, the odds just shifted enormously towards a range expansion to the upside targeting S&P 3000+ by early next week. Zenolytics now offers Turning Points and ETF Pro 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 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...
SOX 1330 Is A Hook For All Of Tech
Since Broadcom destroyed whatever hopes and dreams semiconductor bulls had last week with a cut to guidance and weak revenue numbers, the SOX has declined nearly 6% from its peak. The pain, however, may not be over for SOX bulls. In fact, if one is bullish on the SOX it may be better for the index to reset by touching 1330 before any semblance of a recovery effort is made. 1330 on the SOX should become a hook for the entire tech sector on a positive reversal off this mark. Of course, with the Fed meeting on the horizon, the destiny of investors will largely be in the hands of grey haired academics who think that being dynamic and adaptable is having oatmeal for lunch instead of split pea soup. In any case, while there will be excessive volatility around some key technical points this week, the fact that both the S&P 500 and the SOX are sitting near key points will make navigating the markets that much easier following the typical post-Fed mayhem in the markets. At the very least, investors should take heart in this fact. Zenolytics remains convinced that the current weakness in the SOX will be a buying opportunity for the best and brightest names in the sector. Zenolytics now offers Turning Points and ETF Pro 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 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...
Past Week In Review: Market Is Talking, Who Is Listening?
Everything that happened this past week emanates from the fact that the 2910 did its job in capping the market. Last Sunday, Zenolytics put out a note saying that the buying window for equities was now closed, as 2910 was everything. The high on Tuesday for the week was 2910. Even more significant, the high happened along the lines of a perfect time from a cycle basis. The simple fact that the markets paused exactly where they should on the day that they should isn't enough, however. What we need to know is how the markets react to such symmetry. From observing the market after the touch of 2910, there was an undercurrent of buying that was very obvious. The market wanted to rollover multiple times throughout the week and had every reason to do so given both technical and fundamental developments. However, every time the market started gathering some downside momentum, a wave of buying swept over the market like a cool breeze, calming those who had their fingers on the sell button. This is significant in that it tells of one thing specifically: There are too many bears remaining in the market for it to move down without a severe, surprise fundamental setback. The cool breeze of buying that kept sweeping over the market all week tells of: A majority of sellers who wanted out of the market already being removed from the picture New buyers steadily moving in A steady wave of short covering, following a painful start to June for the bears As we move into a key Fed meeting this week, there are multiple reasons for bears to continue their short covering campaign until the Fed announces their decision. The threat of a surprise 50 basis point cut will likely start ringing throughout the financial media on Monday morning prompting some panic among the bearish camp. Geopolitical instability couldn't take the market down this past week. Semiconductors failing due to Broadcom's woes barely made a dent. A very serious technical point of resistance simply resulted in a sideways market. All of these facts are the equivalent of the market shouting that it wants to test 2910 again early in the week. Only this time around, 2910 will likely fall, with the advantage moving to the bull side until we see what the Fed has to say. Zenolytics now offers Turning Points and ETF Pro 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...
The Whispering Of Valuable Data Pieces
For all intents and purposes, the market should be down this week from both a technical and fundamental perspective. Let's start with technical first. Zenolytics has been laser focused on the 2910 level since this rally started. The high for this week on the S&P 500 was 2910, a level that initially looked as though it would stir up some financial horror stories, at least for a few days. The fundamental picture should have only added a shot of steroids to the bearish case. Just last night, Broadcom basically came out and said they are giving up on the second half of the year. And then we have what looks like war drums beating in the Persian Gulf, with an eye on Iran this time around. Even gold is catching onto how dangerous things are geopolitically, as the safe haven metal is making new highs this week. Yet here we are. It's Friday and the S&P has essentially gone sideways this week, in what is certainly a resounding win for the bulls. Bear should have been able to cause something along the lines of a 1% decline this week. Flaccidity seems to be running rampant in fur ball camp since early June. All of these failures by the bearish camp in the face of just a few of the many negative tailwinds this week are whispering valuable pieces of data to investors who choose to listen. The markets are much stronger than most of us think, reinforced by ultra-low interest rates and bearish sentiment that is filling the stadium well beyond capacity. At the very least we have a test of 2910 coming on the S&P next week. Depending on the reaction to that level, Zenolytics can accurately gauge what remains in store for June. Stay tuned. Zenolytics now offers Turning Points and ETF Pro 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 any jurisdiction where such distribution or use would be contrary to the laws or regulations of that...
Here Is Why Investors Have To Avoid The Narrative On Semis Starting Tomorrow
Broadcom (AVGO) came out with earnings after the close tonight, disappointing on revenues and slashing guidance. The stock was down some 7% afterhours. Of course, the rest of the semi stocks will simply tag along tomorrow with the narrative of a weak second half creating an army of mind-controlled robotic bears, prepared to sell anything semi related that ticks into the green. Then you will have the technical hooligans jumping onboard talking about how the SOX is now putting in the dreaded head and shoulders pattern, which it indeed will be upon a weak close tomorrow. Already, here is some of the bearish commentary from Seeking Alpha tonight about AVGO's earnings warning: It seems as though the general trading population is now completely sure of a second half slowdown, with one fellow experiencing incontinence of saliva while fantasizing about an impending 30% discount to share price. While all of this makes for a wonderful session of pseudo-intellectual debate about various micro, macro and technical factors, its primarily theater and should be treated as such. Earnings warnings may slowdown an uptrend, while creating disruption to price. However, earnings warnings will never create a lasting market top of significance after a large run in any sector. That is simply too much bell ringing, allowing the armies of mindless, financial media obsessed bears the opportunity to simply ring the cash register because the headlines are telling them to. Markets are far too counter-intuitive in nature to allow that. With this said, AVGO very simply isn't going to ring a bell at the top of the semi cycle. It's going to be a far more complicated, dynamic and scintillating process. And it's my thesis that AVGO, far from being a canary in the coalmine for the semiconductor sector, is simply a lonely outlier that will be completely forgotten about by Tuesday of next week. Of course, once an opportunity is spotted in semiconductors moving forward, Zenolytics will pounce with an update of some degree or fashion. Zenolytics now offers Turning Points and ETF Pro 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,...
The Noble Art Of Simplicity
There are years where an investor can shift between sectors and strategies, constantly rotating between what is in favor and out of far. Then there are years, such as 2019 to this point, where investors are best served to stick to what has been working. What has been working in 2019 so far? SaaS Homebuilders Publicly listed private equity names Select media companies, including social media All of which has been buoyed by perpetually lower interest rates, allowing for all of the above listed businesses to function more efficiently. There are businesses during every single economic cycle involving all variations of interest rates that thrive off of different points in the rate cycle. The above listed names happen to do very well at this point in the rate cycle. Of course, it's not just rates that make these sectors attractive, their businesses are levered to trends within the macro-economy that push their business models along the path of least resistance. 2019 may be defined as a year when what has been working will continue to work. This means that being fancy and smart will likely get you in trouble. Simple trend following strategies that buy into the general consensus have worked and will continue working. While there will be chop, such as what we have experienced recently in the markets, that chop should be approached opportunistically, not to get involved with out of favor sectors that haven't done much in 2019, but rather to allocate into what simply has been working. That's what Zenolytics has been doing with recent recommendations to get into Disney last week to subscribers, an underappreciated SaaS play that can be dominant in the years ahead and shares of SNAP last month with a price target in the 20s, as the company is just beginning to click. There will be a time for fancy. Right now isn't it. Zenolytics now offers Turning Points and ETF Pro 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 any jurisdiction...
Zooming Out For A Moment
In the midst of dissecting the short-term swings in the market, it's easy to forget to zoom out in order to properly interpret the wider message that the markets are sending through their behavior. In what is not too different a practice as a clinical psychologist who sees patients go through various stages of emotion, market observers must look beneath the layers of obvious, overt behavior, into the deeper message that the behavior is sending. Over the past few weeks, the markets have become astoundingly symmetrical in their behavior. What does this mean exactly? The markets are simply following the technical markers in the ground to absolute precision. Road signs dictate the direction of the mindless driver. But that's not good enough. So what if the markets are following technical markers. What's the overall message? Here is the answer: When markets behave in a precise symmetrical manner it often means that they are without any type of fundamental foundation with which to put together a substantive, quality move. They are simply directionless, floating about waiting for something to assist in giving it a push to find an ultimate direction. After the mental decapitation investors have faced during the first half of this year as a result of a schizophrenic news flow, it's no wonder the markets have basically gone limp. Everyone is tired. And that's very simply where the markets are presently. Zenolytics has been talking about a sideways, choppy summer for sometime now. The market isn't telling investors anything to make them believe that this won't be the case. In fact, it's reiterating the fact that sideways and choppy is where it's comfortable right now. It will be a traders dream and an investors nightmare. If you're a trader, sharpen your tools and grab a cold brew. If you're an investor, play checkers at the park until September. That's the bottom line. Zenolytics now offers Turning Points and ETF Pro 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 any...
Put A Fork In It: Market Just Gave Away Its Hand
Those of you who have been following the current story line of the market as narrated by Zenolytics have become very familiar with our obsession with the 2910 level. In fact, the 2910 level was being discussed as the ultimate upside target for this rally one hundred S&P 500 points ago on June 5th, in a posting titled S&P 500 Target For The Current Bullish Momentum Coming Into Focus. Point being that S&P 500 2910 has been in the crosshairs since this rally kicked off last week. As the market decided it would fulfill whatever nefarious desires it has here via a gap up this morning to further trap those Johnny Come Lately Bulls who missed last week's bottom, the 2910 level on the S&P 500 became the high for today. More than likely, this will be the high for this week, as well. Buying when it feels good to buy never works. Buying this morning felt good after the perceived safety of what everyone now realizes was a bottom last week after endless headlines of " best week of the year" are being plastered all over the financial news media. Not good enough. While we are not experiencing outright greed here, over the very short-term there is a bit of FOMO taking place in equities. The markets will resolve this through the forced evacuation of long positions via a death defying dance further made vibrant through a negative news cycle that will be curve fitted to the weakness we experience this week. This forced evacuation will in all likelihood occupy the reminder of this week. If you're looking to buy, the buy window may reopen again next week. For the time being, short positions or sidelines remain the most prudent avenue for the short-term minded among us. Zenolytics now offers Turning Points and ETF Pro 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 any jurisdiction where such distribution or use would be contrary to the laws or regulations of...