Weekly Note Preview: A 16 Page Report On The Roadmap For The Remainder Of August; 3 Crypto Names Exhibiting Significant Accumulation Along With Perfect Patterns; A Small-Cap Tech Stock To Invest In As Investors Move Up The Risk Curve
What follows is an excerpt from this weekend's 286th Edition of Zenolytics Turning Points. To become a client of Zenolytics Turning Points or to learn more click here. I want to start by revisiting the framework for this rally I discussed in the 283rd edition of Turning Points on July 31st. We are now at the halfway point for August. If you will recall, I had August as being a nearly vertical ascent, with the ultimate target for the S&P being 4400. As we are at the halfway point of August, the S&P is almost exactly at the halfway point of meeting that target. The vertical ascent I expected has taken more of a violent path, where threats of a lower market cause investors to panic instantly, followed by big gaps up that cause those same investors to miss the next move. In any case, we are on track for 4400 as we move into the final two weeks of trading for August. Future expectations for the remainder of this month have to be constructed around the Jackson Hole meeting. This will be the equivalent of the Powell presser following the Fed decision in terms of overall influence on the market and short-term direction following Powell's comments. As a refresher, while Fed governors must play the role of good cops against inflation, remaining vigilant and steadfast in the face of rising prices, Powell must play to the political establishment, especially as elections are nearing. This means that his soldiers (good inflation cops) go out and do the dirty work of scaring the markets, while Powell (bad inflation cop) himself strikes a much more dovish tone to offset their hawkishness, creating the proper balance for the markets, while alleviating the worries of the political establishment who are concerned that he will tank the economy and the markets right into election day, costing them their jobs and control of government. If we expect Powell to be a bullish force for the markets on August 25th – August 27th , then we must also attempt to figure out how the market will do the most obvious thing (go up) in the least obvious way leading up to Jackson Hole. 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....
Weekly Note Preview: A 12 Page Treatise Detailing The Market Roadmap For The Remainder of 2022
What follows is an excerpt from this weekend's 283rd Edition of Zenolytics Turning Points. To become a client of Zenolytics Turning Points or to learn more click here. What we are witnessing presently is a classic “wall of worry” for the markets that is so vivid, terrifying and all encompassing that investors forget about all the past examples of markets climbing during periods of extreme anxiety, as investors only understand the “why” part of the equation many months later, when the markets are significantly higher. Yes, the markets are indeed forward looking, which is why the study of price never makes sense to the stringent fundamental investor. Current data can never take into account future events, as investors will have no idea how that data will evolve. Price, however, is essentially the wisdom of the market hivemind or collective intelligence expressing itself numerically. Price becomes especially relevant when it expresses itself in direct contradiction to prevailing wisdom. The more powerful the price move in direct contradiction to the prevailing wisdom, the more relevant the signal. What we saw during July and especially during the last week of July, when everyone expected the market to fall after the Fed announcement and earnings is a very powerful signal if you believe in the power of the collective intelligence of the market. The prevailing psychology of absolute disbelief only means that this market has a long ways to go on the upside before properly shifting minds, as it must do prior to a real reversal. With that said, it will certainly take all of August to perform this task. 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...
Weekly Note Preview: The Truth About EPS Cuts And Market Bottoms; The Great Unwinding To Come; The Current State Of Crypto
What follows is an excerpt from this weekend's 280th Edition of Zenolytics Turning Points. To become a client of Zenolytics Turning Points or to learn more click here. MARKET UPDATE The 100 basis point rate hike narrative lasted approximately two days, allowing the markets to reverse towards mid-day Thursday, closing out the week at their highs. As it stands now, we are looking at a 29% chance of 100 basis point hike on July 27th. At one point Wednesday, it was up near 80%. This should drop further in the coming week, as just this weekend, the Fed's unofficial media mouthpiece, Nick Timiraos of the Wall Street Journal, is out with an article solidifying the fact that the Fed wants to do another 75 basis points at their next meeting. With the uncertainty of a 100 basis point move removed, the markets can now go back to focusing on the following: 1. Inflation is being tamed 2. A recession is likely to be a 2023 story, and if we do get one in this year it will be mild 3. EPS cuts are finally here, creating the necessary ingredients for low earnings hurdles that have a high probability of being exceeded in future quarters 4. The markets are basing after a significant decline, with record wealth destruction 5. Everyone is either in cash, hedged or very lightly allocated, especially to what has been working best over the past decade – Growth. When you take all of these ingredients together, it very simply creates a potentially explosive concoction that likely results in upside that is beyond what most are currently considering possible or likely. 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...
Weekly Note Preview: Bearish Pessimism Leads To Unexpected Results; Why Market Ambiguity Is A Huge Tailwind; The Strategy For Growth In Q3
What follows is an excerpt from this weekend's 277th Edition of Zenolytics Turning Points. To become a client of Zenolytics Turning Points or to learn more click here. MARKET UPDATE Bearish sentiment remains the single most prominent feature of today's market. You can divide market participants into two classes: 1. Those who think we are going right back down to new lows 2. Those who think we will stop at around 4050 in the S&P and move to new lows This presents a problem for bearish investors as in order to have their wishes fulfilled, there would need to be an amplification of bearish factors leading to further selling pressure from an investor population that has largely offloaded risk to date. How fervently have investors offloaded risk over the past many months? As it turns out, according to the advance decline of the Nasdaq, they have been selling tech shares at a rate we have not seen during this current bull market. This is real one sided pessimism we are seeing that is historic in scope. 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,...
Weekly Note Preview: Why We Remain Very Much In A Bull Market; Investor Misallocation Will Drive The Next Leg Up; 3 Software Names Under Accumulation That Provide Big Upside In The Months To Come
What follows is an excerpt from this weekend's 276th Edition of Zenolytics Turning Points. To become a client of Zenolytics Turning Points or to learn more click here. MARKET UPDATE This is not a bear market. More importantly, the secular bull market remains very much intact. Analysis of the markets that stems from any other conclusion, more specifically, that we have seen a shift into an intermediate to long-term bear market environment is doomed to failure as the foundation of the analysis naturally creates numerous faulty conclusions that will be systematically disproved by the markets as the secular bull market resumes. Unfortunately, for investors that fall into the “bear market” trap, by the time realization occurs that this has simply been yet another correction within a bull market dressed in different color clothing, markets will be at or near new highs. The problem of bull or bear market classification stems from the fact that investors continue to utilize a pre-March 2020 mindset when considering volatility in the markets. The post-March 2020 volatility regime is a completely different animal altogether than anything in the pre-March 2020 markets. Although the Fed has been attempting to remove liquidity from the economic system, the fact of the matter is that record liquidity remains. Liquidity drives volatility. In turn, investor behavior changes, further exacerbated by financial information that piles onto a specific theme, whether that theme is recession or otherwise, causing investors to make seemingly informed decisions that are anything but. Put as simply as possible, moving from one side of the boat to the other has never occurred in such a uniform, dramatic fashion as it does now. Further amplifying the situation is the fact that there are no more data advantages between investor classes. What this does is to create exaggerated market moves based on data that is being disseminated simultaneously among all investor classes, creating identical reactions. As the volatility of the price action increases in a singular direction, investors both small and large tend to act on that data with more conviction, further driving price in the direction of the primary trend. While liquidity has played an enormous role in the ultra-volatile markets of today, information distribution and the near uniform conclusions drawn from such information also play a major role. More than ever, investors are analyzing identical information with the direction of the primary trend influencing their bias more than any other single factor. All of these factors taken together create massive moves in both directions. The March 2020 decline, followed by the record rally taking place afterwards was the first iteration of the new volatility regime. The...
Weekly Note Preview: 17 Charts Demonstrating Why This Is One Of The Best Buying Opportunities Of The Bull Market To Date
What follows is an excerpt from this weekend's 275th Edition of Zenolytics Turning Points. To become a client of Zenolytics Turning Points or to learn more click here. MARKET UPDATE There are numerous reasons to believe that the markets are in the process of putting in a bottom around current levels that will be looked back on as significant come year end. Following this past week's price action, Fed decision and cross asset correlations, the markets seem to be moving away from the inflation narrative, with an evolving realization that the economy has already stalled, being broken down on the side of the road, while the Fed keeps taking a baseball bat to its windshield. While the Fed can be behind the curve for months on end, the markets are much wiser, seeing further down the road than anyone can imagine as real capital is at stake. The Fed, on the other hand, has numerous conflicting motivations, whether political or otherwise. As we all know, the Fed raised by 75 basis points this past week, for the first time signaling that they are serious about tackling inflation. And this weekend, this newly conceived tough guy stance from the Fed was further confirmed by a Fed official who stated they will most likely raise by another 75 basis points in July. Given how quickly the economy is deteriorating, the 75 basis points they do in July, if they indeed follow through, will be their last rate hike of the year. I expect the market to begin sensing that any day now. In the meanwhile, we have complete and utter chaos taking place in nearly every risk related sector that is not associated with commodities. Leading into and following this past week's Fed meeting, numerous historically relevant signals have taken place demonstrating the extreme nature of the selling that has taken place. This is taking place just as we reach peak inflationary fears, with investors forgetting what is on the other side of the Fed destroying wealth, ballooning inventories and all but eliminating consumption. Perhaps by design or perhaps by pure coincidence, we are reaching peak inflationary fears right as we are about to make our way into election season past July. The motivation to take care of the threat of inflation in as expeditiously a manner as possible has arrived. 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...
Weekly Note Preview: What The Breakdown In Volatility Means For The Markets; Why Economic Ambiguity Is Providing Opportunity In Equities; The One Name In Growth That Won’t Be Warning In A Recession
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. What follows is an excerpt from this weekend's 272nd Edition of Zenolytics Turning Points: MARKET UPDATE In a year strewn with volatility, the fact that we just saw one of the tightest weekly ranges of the year is a subtle, yet extremely important hint at where we find ourselves within this bear market cycle. Before getting to the details, let's look at an illustration of the collapse in volatility, as expressed by the volatility index of the VIX. The VVIX is a chart I have shown in the past. Here it is after this week: We are essentially seeing a breakdown in the volatility expectations moving forward for the VIX. There are numerous explanations as to why this is occurring as world events seem to dictate anything but the relative calm the above chart is suggesting. The VVIX, however, gets a whole lot more interesting when you consider what the S&P 500 did this week versus some historically significant support and resistance zones that I have been highlighting for years now. 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...
Weekly Note Preview: 2021 Offers Investors Multiple Avenues To Outperform, But Those Avenues Will Be Much Different Than What 2020 Offered
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. What follows is an excerpt from this weekend's 180th Edition of Zenolytics Turning Points: MARKET UPDATE With the new year comes the tradition of forecasts for the year ahead that are typically based on both recent past performance and some measure of distant historical precedent. While many are attempting to handicap 2021, to do so demonstrates either a certain degree of arrogance or ignorance as we are moving into a terrain that is alien to all of us. What has occurred since the virus crisis in March and the resulting massive stimulus measures, whether fiscal or monetary, has been an acceleration of dynamics that should have taken 5-10 years to properly prepare for and digest. This has forced a great amount of stress on both societies and economies globally. We are seeing that stress expressed through the great amount of social unrest, mostly aimed at governments, whether with respect to economic inequality or lock down measures that are seen as unnecessary or abusive in nature. We are also seeing that stress expressed through massive volatility across numerous asset classes that have primarily taken the direction of upside in everything from small-cap stocks, cryptos and even sports memorabilia is seeing values inflate as endless amounts of capital seek a home away from cash. This stress induced appreciation of asset prices, forced by what is essentially the destruction of cash as an asset class, is a volatility enhancing event. “Volatility enhancing” is likely not a powerful enough term to properly classify what is occurring presently, however. What we have seen occur in asset prices, induced by governments being forced to destroy their monetary base, is the beginning of a volatility explosion that will be both deceptive and ultimately, destructive in nature. The only forecast for 2021 that has any chance of being accurate then is that it will be a year where the forces of volatility will become even pronounced, taking the form of both upside and downside volatility that can be potentially historic in nature. Our job as investors is to first and foremost, protect capital in such an environment. And secondly, to capitalize on this volatility to the best of our ability. 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,...
Weekly Note Preview: Market Update
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. What follows is an excerpt from this weekend's 178th Edition of Zenolytics Turning Points: MARKET UPDATE Another round of fiscal stimulus, with a likely consumer focused stimulus check component attached, is on the verge of passing. In the meantime, the important market averages are all consolidating ABOVE a key area of resistance that has now turned into support. These types of tight wound consolidations above key resistance levels that have become support are high percentage areas to take on leveraged long exposure, as we have done. There are other advantages, as well. Primarily from a risk control standpoint, knowing exactly where the market should not go, is a rarely discussed yet extremely valuable tool to possess. In this case specifically, we know exactly where the markets should not go moving forward, giving us an extremely well structured framework from which to take on leveraged long exposure. While it may not be en vogue to discuss risk in the current market environment, instead opting to simply pull your pants down and let it fly, the goal of investment is to preserve capital while taking well calculated, aggressive risk. In other words, the approach here will always take into account what our downside might be and from there we build the framework of our current approach to the market, along with the allocations necessary to take advantage. Now onto some charts to illustrate exactly where the market should not go from here.... 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...
Weekly Note Preview: The Important Message Price Is Telling Investors After This Past Week; The Next Important Level of Resistance For The Market; An Important Ruling For Our Favorite Mortgage Related Value Name; One Chart That Summarizes Why Every Investor Should Invest In This Sector
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. What follows is an excerpt from this weekend's 175th Edition of Zenolytics Turning Points, where we discuss the following the topics in a 14 page note: The important message price is telling investors after this past week Where the next important resistance level for the market may lie An important mortgage ruling this past week that opens the door for our favorite mortgage related value name One chart that summarizes why every investor should have exposure to a specific financial sector at this stage of the recovery MARKET UPDATE In a market that has taken it upon itself to disregard anything and everything but buying the dip, while central bankers continue pushing the QE button to infinity, we are at a point in the market cycle where intellectual capacity to classify such actions must be traded in for the purity of price action alone. In other words, instead of attempting to rationalize what is occurring in the economy and the markets against any historical precedent or relevant comparison, of which there are none, investors are better off looking at what asset prices from currencies to major indices are telling us. What must not be forgotten, however, is that bulls are effectively corralled here into a pattern of behavior and concentration of investments that is vulnerable over the long-term. For the time being, while the music is playing, the dance is simply too much fun to sit out. However, the ability to adjust quickly in a defensive manner while enjoying the upside will be key to outperforming and more importantly, walking away with profits in hand. A vast majority of those participating in this orgy of capital gains will walk away with but a fraction of what they have presently. That is the simple truth of manias that get to these extreme levels. It's not an IF equation, it's rather a WHEN equation of how the market chooses to exact revenge upon those who believe above average gains will be the norm, while every single dip is a buying opportunity of epic proportions. This has been the rule of speculation since cavemen traded bones and rocks in the neolithic age. Every single time investors have come to believe that this rule of speculation has changed, they have been punished in an extreme fashion. HOWEVER, in the meantime, the music is playing. So let's dance. At the same time, understand that defense in the form of hedging and taking lots of profits along the way...