Weekly Note Preview: The Ramifications of a Flat Fed Balance Sheet; Indications of Liquidity Drying Up; Analysis of Potential For Fiscal Stimulus; Targets For Nasdaq In October
What follows are the topics covered in this weekend's note to subscribers. To become a client of Zenolytics Turning Points or to learn more click here. The excerpt from last weekend's note is available here. In this weekend's 11 page note we discuss: The ramifications of a flattening Fed balance sheet at this stage of the recovery Indications that liquidity is drying up Analysis of the potential for fiscal stimulus to be passed and when it might pass The likely reaction to a fiscal stimulus package passing in the near-term The earnings season ahead Continued analysis of the shifting landscape beneath the market Targets for the Nasdaq in October MARKET UPDATE The bullish argument as we move into Q4 of a year many are looking forward to putting behind them is largely founded on factors that are now largely accepted as fact. The very act of investors accepting these arguments as being fact equates to capital being allocated in a direction that seeks to take advantage as the perceived outcome evolves through price. Naturally, that capital becomes vulnerable to sudden shocks that challenge the consensus understanding of the time. In order for bullish positioning to continue experiencing an upside push, investors are now relying on three catalysts to come together: 1. Fiscal stimulus 2. Continued momentum in corporate earnings 3. Continued momentum on the macro economic front At the same time, the liquidity foundation of the markets is not nearly as robust as most investors assume. Since June, the Fed has refused to grow their balance sheet, essentially cutting off liquidity, relying on momentum from that initial injection to prevent a full blown, long-term economic crisis. In this weekend's 11 page note we discuss: 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...
Weekly Note Preview: The Rapidly Shifting Sentiment Picture; Massive Changes In The Foundation Underlying The Market Since March Lows; Market Scenarios Surrounding Stimulus; The Next Big Move In The Markets
What follows are the topics covered in this weekend's note to subscribers. To become a client of Zenolytics Turning Points or to learn more click here. The excerpt from last weekend's note is available here. In this weekend's 18 page note we discuss: The rapidly shifting sentiment picture Numerous charts detailing the massive change in the foundation underlying the market since the March lows The various market scenarios surrounding a stimulus bill passing vs. not passing in the week ahead In what direction the next significant, sustained move in the market could take place given the evolving data 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, regardless of cause, or the lack of timeliness of, or for any delay or interruption in, the transmission thereof to the user. With respect to information regarding financial performance, nothing on this website should be interpreted as a statement or implication that past results are an indication of future...
Weekly Note Preview: How The Decline To Begin September Was A Tell; The Role of Seasonality This Election Year; Important Names That Have Gone From Accumulation To Distribution
What follows are the topics covered in this weekend's note to subscribers. To become a client of Zenolytics Turning Points or to learn more click here. The excerpt from last weekend's note is available here. In this weekend's 13 page note we discuss: How the decline to begin September was a "tell" and what that tell entails. The role of seasonality this election year. Important names that have gone from being under accumulation to being under distribution. A technical review of the Nasdaq and the S&P along with downside targets. MARKET UPDATE At this very point in time, the S&P should have been at 3600-3700. The rally in technology should have been gaining momentum virtually unabated. Lagging sectors should have been in the midst of a recovery to demonstrate, at a minimum, some semblance of a respectable recovery since the March lows. That was the road map for this time period created when the market bottomed in March, without much in the way of any indications that this road map would be compromised in any manner through the end of August. What we have experienced in September, however, has been a complete annihilation of that road map. The market has been telling us for months now that the bullish road map was both robust and significant in its ability to outperform. The market is now telling us the exact opposite. The bullish road map is now null and void. Recognition of this fact will be a key driver of outperformance for the next several weeks, at a minimum, if not for the remainder of the 2020. 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...
Tuesday’s Note Preview: The View and Position To Take After The Recent Market Drop
What follows is an excerpt from Tuesday's note to subscribers. To become a client of Zenolytics Turning Points or to learn more click here. The excerpt from this weekend's note is available here. When everyone is intimated by the promise of future chaos, it is rare for the markets to fail to take advantage through some form of deception, feeding on those very fears. We now know that the market won't be feeding on those fears by moving virtually straight up through the elections, causing investors to feel like a drop is imminent at any moment. We already had the drop. That thesis is dead. Leaving us to determine what is the path of maximum confusion from this point forward? Is the market simply kind enough to award the stampeding bulls with the steepest drop off an all-time in history to simply move back up to new highs through the event that everyone fears? The fact that the Nasdaq dropped by as much as it did when it did means that the market is acknowledging two things: 1. We are in a highly adverse seasonal period 2. We have one of the scarier events in recent memory a short time away This acknowledgment by the market is an indication that both adverse seasonals and difficulty around the elections are now in play. In other words, the market is going to do exactly what one would expect during the September/October period according to history, especially when a nearly impossible political event to handicap correctly lies dead ahead. Volatility is set to increase. The volatility will feed into the fears surrounding both the seasonal period and the election. 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...
Weekly Note Preview: Unexpected, Emerging Technical Signals; There Are No Do-Overs In The Market From This Point Forward
What follows are the topics covered in this weekend's note to subscribers. To become a client of Zenolytics Turning Points or to learn more click here. The excerpt from last weekend's note is available here. In this weekend's 9 page note we discuss a significant change in our outlook for the market during the remainder of 2020, along with how to capitalize on the unexpected nature of the moves to come. There are several technical signals having taken place over the past couple of weeks that are of equal importance to those seen at the March lows. This is a point in time where investors will be well served to make the right decisions, as there will be no do-overs. 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, regardless of cause, or the lack of timeliness of, or for any delay or interruption in, the transmission thereof to the user. With respect to information regarding financial performance, nothing on this website should be interpreted as a statement or implication that past results are an indication of future...
Weekly Note Preview: The Late 90s Roadmap; Nasdaq Correction; A Big Shift In Risk/Reward; Sentiment; A New Leveraged ETF; Portfolio Changes
What follows are the topics covered in this weekend's note to subscribers. To become a client of Zenolytics Turning Points or to learn more click here. The excerpt from last weekend's note is available here. In this weekend's 11 page note we discuss: How the late 90s roadmap applies to the market of 2020 What to expect from the Nasdaq after this correction How risk/reward shifted this past week in a big way Nasdaq support/resistance levels Gauging sentiment via fund flows A new leveraged ETF for aggressive investors Portfolio changes after this week's correction MARKET UPDATE The market remains on an accelerated schedule. In fact, it's not just accelerated in any normal sense of the word, the market is moving at warp speed in order to arrive at whatever destination it has in mind during 2020. This is important information in and of itself. The fact that the market is choosing to move at what is an unprecedented pace in price. Without getting too far ahead of myself, typically significantly accelerated moves well into a secular bull market are associated with a top of some significance being in the works at some point in the distant future. The problem for investors is its impossible to know if that distant future is 3 months, 9 months or 18 months from now. It is also difficult to ascertain the role of liquidity and the unprecedented role of central banks in the markets to determine whether the old rules of naturally accelerating trends leading to blowoff tops down the road applies here. The last time we faced an accelerated market on par with what we are witnessing presently was the late 90s. In fact, the Nasdaq post 1998 LTCM crisis moved at a faster pace than what we have seen from the Nasdaq in 2020. The key difference between 1998-2000 and 2020 is that the Fed was on a completely different mission. After adding liquidity to avert a crisis in 1998, the Fed started draining liquidity by steadily increasing the Fed Funds rate during 1999 and 2000. 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...
Weekly Note Preview: How To Handle Coming Resistance Levels in Nasdaq & S&P; A Forecast For September Trading; A Rotation Based Trade Idea; Further Research On Newest Portfolio Holding
What follows are the topics covered in this weekend's note to subscribers. To become a client of Zenolytics Turning Points or to learn more click here. The excerpt from last weekend's note is available here. In this weekend's 11 page note we discuss: Fed's new inflation policy and what it means for equities moving forward. How to handle coming resistance levels in Nasdaq and S&P. A forecast of what September trading should look like. Detailing a rotation based trade with significant upside and little risk into year end. Further research on a new portfolio holding introduced last week. MARKET UPDATE The failure of the bears to make even a slight dent in August trading sets the tone for the remainder of 2020. That tone is decidedly bullish, with very little in the way of downside volatility to take place. Moves to the downside should be no greater than 5% into December. The backstop for continuing persistent buying support for the market is based on the following: 1. Fed policy now forcefully weighted towards an inflationary outcome after this week's announcement. Stocks and real estate have significant upside for possibly years to come, as cash becomes worthless under such a scenario. 2. There remains a significant amount of cash sidelined that needs inflation protection. Inflation protection can only come via investment in stocks, real estate, precious metals etc. 3. Performance chasing via underinvested fund managers is just beginning. With the S&P nearing the double digit percentage gain mark and the VIX about to fall through 20, the performance chase is set to intensify. 4. Earnings in October/November for Q3 will continue to be impressive, leaving little in the way of the excuses to not be invested. The cat is already out of the bag with respect to this, providing a supporting bid to equities on any weakness whatsoever into Q3 earnings reporting period. 5. There remains a vast contingent who believe somehow September/October have to be weak due to seasonal factors. Seasonals have been irrelevant for all of 2020 and they will continue to be irrelevant. This market is functioning according to its own set of rules during a very unique period in time. 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...
One Single Sentence To Sum Up The Bullish Thesis Into Year End
To isolate this market into any box that resembles any correlation to the past is folly to the highest degree. In fact, since the very beginning of this rally, attempting to extrapolate any future results from the past has only been an exercise that would end in disappointment. Two once in a generation events made historical comparisons irrelevant from March onward: A once in a generation virus A once in a generation reaction by governments worldwide, involving both fiscal and monetary stimulus The situation has only been exacerbated by the realization that the data relied upon to make sure decisions may have been flawed from the outset. Where does that leave the markets? With record stimulus that is impossible to take back without inflation that can only be cultivated via an increase in asset prices. And there you have it: The thesis for being bullish since the March lows and continuing to be bullish past the elections in one single sentence. Enjoy your evening. Zenolytics now offers Turning Points Market Intelligence 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 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, regardless of cause, or the lack of timeliness of, or for any delay or interruption...
Weekly Note Preview: An Illustration of How The Market Should Look This Year; What The Nasdaq and S&P Are Telling Investors After This Week; Concept of a Parabolic Ladder; Portfolio Additions
What follows are the topics covered in this weekend's note to subscribers. To become a client of Zenolytics Turning Points or to learn more click here. The excerpt from last weekend's note is available here. In this weekend's 12 page note we discuss: Viewing the market in proper context An illustration of how the market SHOULD look this year The proper way to view market internals against the current backdrop What the Nasdaq and S&P are telling investors after this week The beginning of a "parabolic ladder" led by AAPL and TSLA What levels the S&P will be attracted to next The next names down the "parabolic ladder" that can make substantial moves New portfolio additions Market Update It's essential to view this market completely apart from the various market statistics that attempt to box this rally into a historical context that is largely irrelevant. In recent months the death of investors has come from viewing this rally against rallies of the past, disallowing them to participate in the upside given the false signals that will naturally be derived from comparisons that have no place given what we have faced during this unique period in time. From the very beginning of the March virus crash, my own view of the market action was that it was a mistake. In other words, the market made one of its largest estimating errors in history in terms of what the overall effects of the virus would be to earnings and the economy at large. The market also made one of the largest estimating errors in history in terms of the duration of stress to the economy. What made this estimating error especially potent for the financial markets is that it infected every single level of the market ecosystem. From the very bottom (retail investors) to the very top (institutions, including the Federal Reserve), everyone reacted simultaneously in the same way to what was seen as a Armageddon like scenario based on the vast exaggerations of its intensity. The most consequential overreaction, by far, has been the Fed injecting the economy with trillions of dollars in stimulus while fiscal policy has been equally generous to prevent fear from collapsing the system entirely. This overreaction has virtually guaranteed investors a positive outcome for a time period that will be longer than most anyone currently suspects. In order to properly gauge this market then an investor must essentially disregard the big V bottom for the S&P 500, instead looking at the market as basically being flat on the year, with a massive stimulus cushion now behind it that didn't exist prior to the great panic...
Portfolio Update: What Next?
In the perpetual, everlasting saga of of the equity markets adaptation is a key trait that often gets glossed over by generic rules like "never average down," "cut your losses short," "you never go broke taking a profit." The very simple saying of "adapt or die" is a much more fitting approach to investing than any list of so called rules that you see and hear on a daily basis. Adaptation means that you don't sit out on a historic rally because you believe the market is being propped up by the Fed, being prone to collapse at a moments notice. Adaptation is realizing that if it is true that the markets will collapse at a moments notice you will adapt to that scenario with equal efficiency as being long since April. Adaptation is not trying to sound smart by dismantling TSLA's balance sheet, income statement and product quality when the stock was $300 per share and sticking to those same arguments as it breaches $2000. Adaptation is not trying to flex your cerebral muscle by discussing useless economic statistics that are backwards looking and professorial in nature, at best. Adaptation is making money in the markets, plain and simple. When we last left off here on August 10th, I discussed our move to cash after putting together a double digit percentage gain to begin the month of August. The general stench emanating from in everything from software to FANGs at that time created some level of concern. What has happened since then has not just been one or two brutal fumbles by the bears, but nearly a dozen. The bearish camp, especially into the middle of this week, had every factor possible leaning in their favor to take the markets down, however temporary. Instead they completely gave up their position to the bulls, with a close a record highs for both the Nasdaq and S&P to close the week. Beginning Thursday in T11 and Zenolytics portfolios we began to systematically increase exposure. The increase in exposure for these portfolios will likely continue through the early part of the coming week. Simply consider this single fact: The S&P has taken from June to late August in preparation for this move to new highs. A generally tight consolidation, as the S&P digested its gains. This week it very calmly moved to a new all-time high as if it was a routine action, without cause for much of any attention at all. These subtle hints of underlying market strength should not be overlooked. Nor should it be overlooked that we are now at new highs, with very little left in the...