Weekly Note Preview: What The Numerous Distribution Patterns Popping Up Mean For The Markets During The Weeks and Months Ahead
In this weekend's 328th edition of Turning Points we have a 16 page note going over the numerous distribution patterns showing up in the market after nearly two years of sideways consolidation and what they could mean for the weeks and months ahead. What follows is an excerpt from this weekend's note. MARKET UPDATE During times like this, the best course of action is always to simplify to the greatest degree possible. It doesn't get any simpler than the chart of the S&P 500. For this chart, I have intentionally highlighted the 4200-4350 level. More specifically, the resistance envelope (red, gray, white trajectory lines) that exists in that range. More than anything else, this highlights a very real problem for the markets moving forward. I'll explain why. First, here is the chart: I have purposely lightened a majority of the technical support/resistance points on this chart so that the red and white trajectories stand out. You will immediately notice on this weekly chart that going back to December 2018 (the infamous taper tantrum), March 2020 (pandemic panic) and 2022, whenever this series of trajectories has broken from above, the markets have become extremely slippery, extremely fast. These trajectories go back to 2008/2009, carrying quite a bit of weight for the entirety of this bull market. They are extremely relevant, in other words. I have been discussing speed and time being of the essence for the markets since the beginning of this year. The S&P chart above and more specifically, the manner in which the market is consolidating below the red and white trajectory points is the reason. For example, you can see that during the December 2018 panic, the market realized time was of the essence, quickly regaining the trajectory. You can see that during the March 2020 panic, the market realized time was of essence, quickly regaining the trajectory, despite moving well below it during the pandemic crash. This time is very different, however. Investors are not bidding up the markets in a frenzied fashion as they have in the past. Instead they are slowly distributing stock over time. A distribution pattern. And it's a very significant one, in fact. The significance comes from where it is occurring along with the length of time that it is taking. The breakdown of such a pattern carries technical consequences that are extreme in nature. 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...
Intra-Week Update Preview: Detailing One Of Our Favorite Shorts In The Months Ahead
In this 327th edition of Turning Points we have a 5 page note going over one of our favorite shorts that put in significant blow-off top today. PORTFOLIO UPDATE I will discuss the markets in detail this weekend. Overall, I am getting very bearish with continued technical confirmations that something is certainly awry. With that said, the next leg of the downturn, if it does come to pass, will be the most vicious. My goal, more than anything else, is to avoid and hopefully capitalize on what is to come in the best way possible. 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 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...
Weekly Note Preview: A Market Update & Two New Trades Initiated After Today’s Move
In this week's 323rd edition of Turning Points we have an 8 page note going over what the recent display of strength in the markets means looking out 1-2 weeks, along with two new trades, one in our short-term trading portfolio and one in our intermediate term swing trading portfolio. MARKET UPDATE The expected 25bp hike came today with an unexpectedly dovish Powell forcing investors to completely unwind the inflationary trade. This meant lower yields, lower dollar and higher prices for risk assets. This has been an impressive week in one way in particular. For all intents and purposes, the SPX should have tested the 4000 level this week. For all intents and purposes, the NDX should have tested the 11700-11800 level this week. The best the bears could do after a convincing reversal on Monday was 4015 on the SPX. What seems to be informed buyers conspicuously came into the market immediately on Tuesday following Monday's weakness, bidding up stocks, not even allowing the SPX to touch Monday's low. Tuesday's low was 4020. 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 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...
Weekly Note Preview: Why We Are Reducing Exposure After Being Nearly 200% Long For Much Of January
In this weekend's 322nd edition Turning Points we have a 12 page note detailing the reasons why we are reducing exposure after being nearly 200% long for much of January. MARKET UPDATE Given that we have both a big Fed week and a big earnings weeks, most anything I say here today will be largely irrelevant within a few days depending on how events shake out. Going into the events of this week, we are at a technical crossroad for the market where any further acceleration up can result in significant upside momentum developing for some weeks, blowing out all kinds of resistance areas. Our dilemma, of course, is that we are beholden to the events of this week to determine whether that becomes a reality or we see further delays along the path towards SPX 4200-4300, with an eventual destination of 4500 during Q1. What is noticeable is that investors are beginning to succumb to the emotional challenge of being sidelined while some terrific gains are taking place. These are the top gainers from my watchlist. It's rare you get so many equity names within a few weeks that are up so significantly. Fortunately, we have held or currently hold a handful of these. Irrespective of deeply ingrained bearish psychosis, remaining in cash while these types of gains are taking place is a difficult proposition for most. We are beginning to witness emotional upheaval expressed through price with increasing frequency, especially this past week. 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 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...
Weekly Note Preview: Speed Is Of The Essence
Below is an excerpt from the 320th edition of Zenolytics Turning Points. This past week was right up there with our performance coming out of the March 2020 lows as well as some of the other major turning points over the past few years. Whereas during those turns we largely held onto positions, favoring a multi-month swing approach to trading, in the current climate it's critical to capture some of our profits until we get more technical clarity. Of course, we are still heavily long by any measure after taking off *** and ****. For that reason, I want to see technical clarity develop in the next couple of weeks, otherwise there will be further scaling back to around 100% long in the equity portfolio. What do I mean by technical clarity? You will see three separate highlights in the chart of the SPX above. The first green arrow from June of 2022 was when we fell into what I call no man's land. Ideally, the market would have been able to sustain the bottom end of the red band at around 3900. However, given the liquidity pressures brought on by the Fed, the market wanted a deeper reset tagging the enormous wall of support at the October lows, marked by the CPI reversal on October 13th. The full 12 page report is available to clients by visiting https://www.zenolytics.com/premium/ 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,...
Weekly Note Preview: As Investors Continue To Get The Relationship Between The Fed and The Markets Completely Wrong, A Significant Opportunity For Investors Emerges In The Months Ahead
In this weekend's 313th edition of Turning Points we have 15 pages of data going over why a majority of investors are getting the relationship between the Fed and the markets completely wrong, along with how to capitalize in the months ahead. MARKET UPDATE There are a handful of emerging themes that I expect will be gaining momentum in the months ahead among investors. The most significant of which is the fact that Fed rhetoric and market direction can function independently of one another. The greatest liability among investors presently is that a vast majority believe that the Fed is the ultimate arbiter of market direction according to both their language and their policy decisions. This deeply ingrained belief among investors will cost them the ability to act rationally in the months to come as the markets once again take the path least expected by running up into a Fed pause, with a distinct possibility of a top being seen in and around the time the Fed actually begins to cut rates. In other words, the entire script of the 2009-2021 bull market will be flipped on its head moving forward. Investors have become much too comfortable with the “just follow the Fed” mantra, believing that by simply waiting until the Fed is finished hiking, they can conveniently buy the S&P around current levels, taking further confidence that the Fed may actually cut rates at some points, boosting the S&P to new highs while investors ride their coattails. If only the markets were so easy. The CPI data bottom in October also marked a turning point for Fed sensitivity of the market. Since then, we have had numerous Fed speakers, including Powell himself in the post-FOMC decision conference attempt to hit the markets over the head with the hawkish stick....it hasn't worked. What is going to be especially unnerving for the majority of investors who believe they can simply wait around for the Fed to stop raising rates before allocating their capital is how high the markets can go as the Fed continues hiking rates, albeit with Fed hikes seeing decreasing velocity over the next few meetings. The chart below encapsulates this point perfectly. This is how the market reacted in 1982 as Volker was near the end of his rate hike cycle: 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...
Weekly Note Preview: 3 Events That Create A Window For A Significant Rally Directly Ahead
In this weekend's 310th edition of Turning Points we have 13 pages focused primarily on the timing of 3 events that create a 5-6 month window for a significant rally in the markets directly ahead. What follows is an excerpt from page of 3 this weekend's note: At the very same time, when QE kicked into overdrive in March 2020, I explicitly stated numerous times that the volatility we would experience in the markets from that point on would be unlike anything we have ever experienced. There is no historical context for a market rife with liquidity in a debt based economy facing inflationary pressures while central bankers realize their very existence is at stake if they can't get the situation under control quickly. Unprecedented situations create unprecedented outcomes. Increasingly, my thinking on timing this move has moved to a timeline involving the following factors: 1. When the Fed will be done raising rates 2. When a recession will become official 3. When the introduction of CBDCs (central bank digital currency) will take place All three of these factors share the same common trait: They are all predicated on economic weakness. The Fed will be done raising rates when the economy weakens to the point where they can no longer justify the rate hikes. A recession becomes official once economic factors make it clear that we are in a period of declining growth. CBDCs can only be introduced and eventually embraced as a result of absolute necessity in the form of universal basic income during a period of economic distress, where the jobless rate is increasing dramatically and consumers have no other option to maintain their livelihood. Let's look at the estimated timing for each of these events, beginning with CBDCs.... 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...
Weekly Note Preview: All The Data Demonstrating Why This Past Week’s Price Action Creates A Bullish Tailwind Into Month End
In this weekend's 306th edition of Turning Points we have 15 pages reviewing all the data pointing to this past week being the spot to get long given the bullish tailwinds ahead. 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 performance....
Weekly Note Preview: A Period of Adjustments; 4 Charts Demonstrating How Important Current Levels Are For The Markets; Outlook For The Week Ahead
In this weekend's 302nd edition of Turning Points we review the adjustments necessary to remain profitable in the current market environment. We look at the key levels that the market is currently testing as well as the outlook for the week ahead. As we move deeper into bear market territory there are a number of adjustments that are necessary. We made the first adjustment on the first day of September, dumping our portfolio of long positions prior to what turned out to be the worst September for the markets since 2002. Since then we have been profitable in trading short-term swings from the long and short side, a practice that I don't see us changing anytime soon given the current market environment. The adjustments that are necessary don't simply stop at trading. There are adjustments that need to be made to the analysis I present, assuming the markets remain in the same condition they are in at present. What transpires during bear markets as they continue to push forward is an invalidation of every single truth that investors hold near and dear to their hearts. This goes for both fundamental and technical data. Fundamental data always lags, making it impossible to pinpoint market bottoms during a bear market utilizing any economic reports, earnings, macro factors or otherwise. There is no magic level for yields, the CPI or even Fed action to spot an absolute bottom during a bear market. Given that so many investors are clinging onto the “once the Fed resumes QE, markets will soar” thesis, we can assume that once they do resume QE, whether next month or next year, the markets will react in a much different manner than they did in March 2020 onward. The fact of the matter is that faith in central banking as an economically viable practice with consistent outcomes is being heavily tarnished in the current environment. I can imagine a scenario with the next round of inevitable QE where the Fed will underestimate the amount necessary to create an impact, as investors have become desensitized to large numbers with respect to QE. It will take them weeks or months to right the ship. There is no magic bullet with fundamental data or the Fed at this juncture of the downtrend. Technicals are a bit more complicated. There are pockets of technical data that can prove invaluable when it comes to getting the general vicinity of an important bottom right. However, a majority of the technical data investors will cling onto, should this bear market progress further downward, doesn't only become useless but harmful to investors as false signals are produced...
Weekly Note Preview: The Ingredients Necessary For A Real Market Bottom & A Roadmap To Take Advantage Of A Short-Term Opportunity During The Week Ahead
In this weekend's 301st edition of Turning Points we look at the necessary ingredients for a real market bottom and plot out how to take advantage of short-term swings in the market during the week ahead. We moved back to cash on the equity side of our portfolios after taking advantage of what was a predictable setup to get short after the Fed meeting. What was particularly striking about the post-Fed move was that it became obvious as we closed out the week that investors were actually waiting for the Fed to play savior, holding off on selling decisions until after the FOMC meeting. Once it became obvious that this Fed meeting would fail to produce a positive post-Fed result, as most investors expected, those same investors became trapped in a rapidly declining market that wanted to test its June lows with true expediency. While the selling created a good deal of panic to close out the week, it didn't seem like the type of washout necessary to put in a sustainable low from which the market can mount a rally back over 4000 on the SPX. This leaves the market with two options from here in order to create the type of base necessary from which the market can mount a real rally... 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...