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...
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...
Weekly Note Preview: The Psychology of Stalling; A Surprise Outcome For Markets Into Election; Shifting Conditions….
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 psychology of stalling right beneath new all-time highs for most of August A surprise outcome for the markets into elections that few are discussing Adapting to shifting trading conditions Four areas of concern for the market after this week A potential event bearish catalyst this upcoming week Market Update The psychology of the present market is one that deals in a great degree of certainty versus where we were even a month ago. The revelations of the past several weeks especially, with Q2 earnings shattering expectations on the upside, and guidance being equally as bullish, has caused a certain confidence to emerge that has done away with many of the fears plaguing investors over the past several months. A foundation of confidence, however, comes at a cost to investors. That cost is in the form of exactly what we experienced this past week: Equity prices that are seemingly wading through molasses with little in terms of predictability or overall direction. The fluidity with which stocks were moving during the first phase of this rally has turned, as fear has been removed from the equation and a certain sense of confidence has emerged. Let's take, as one obvious example, the issue of the S&P 500 sitting right beneath its all-time high for a majority of August, while nearly all of Wall Street is preparing for that all-time high print. If you look through the financial media, there are no less than a hundred articles discussing the coming new all-time highs for the S&P 500. 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,...
Weekly Note Preview: Air Pockets; FANGs; Software Names; Gold & Silver; Financials; Resurgence For Real Economy Names; Zillow
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 15 page note we discuss: Potential for air pockets beneath the market during August What FANG names are telling us about the market What software names are telling us about the market Important signals conveyed by gold and silver late in the week Financial names A resurgence for "real economy" names in the offing? A review of what may be in store for Zillow after we took profits on Friday. Market Update Coming into August, I had this as a month that had a high probability of seeing some act of barbarianism towards what has become a significant herd of rampaging bulls. The key to outperforming during a month when the probability of such an event exists is to do whatever possible to avoid the downside move, looking for signals within the market of shifts in capital that nearly always precede market calamities of every amplitude. Of course, our risk in avoidance is missing out on greater gains in the market by being in a cash position, as we are now. However, performance must also be considered when making these decisions. After our Zillow trade, T11 portfolios are already up a double digit percentage for the month, allowing for some measure of defense to be taken without fear of underperforming an S&P that is up 2.45% month to date. This isn't the first time we have taken a sudden evasive defensive maneuver. In fact, we have taken similar measures, moving to a cash position, during June and July. We had the added benefit during those months of being allowed to take this type of defensive maneuver, removing us from harms way, while still greatly outperforming the market. I do realize that in the future we may not get so lucky, with the market moving away from us more quickly than we can react. This is the obvious risk of making such a decision. The reason to take such defensive measures in a rather sudden fashion has to do with primarily technical signals that I will go over here shortly. There are broader reasons, however, to take on such measures as a trend matures. As a bullish trend matures, participation in the trend increases. That participation comes from two sides. The first is those who have grown optimistic about the market, putting capital to work. The second comes from those who have grown less pessimistic about the market, covering their short positions....
3500 On Tap For The S&P 500
What follows is an excerpt from yesterday's Market Update, sent to subscribers, discussing the reasons the S&P was going to accelerate in the days ahead. To become a client of Zenolytics Turning Points or to learn more click here. The markets have moved through another period where the bears had an opportunity to seize some semblance of control. Once again, they have failed miserably in the first two days of trading in the new month. These type of failures by the bearish camp around key spots have served as signals that have been worth their weight in gold since the March lows. This time has a high probability of being much the same. To put it simply, the bears had a window in time coming into August as the markets were up against resistance to turn the bulls around. It's not, however, just the failure of the bearish camp that's important, it's the manner in which the markets are choosing to proceed. Let's look at the chart for the S&P in order to better understand the importance of the path of progress: This is the only chart we need to review tonight as it tells an investor everything they need to know. The nature of the movement in the S&P to start this week here is astounding on so many levels: 1. Notice the calm, deliberate manner the market just busted out of the resistance zone it has struggled with over the past couple of months. This is a massive continuation pattern/signal, suggesting a ton of accumulation beneath the surface. 2. The S&P closed at 3306 today. The lack of volatility while piercing a round number is also a signal, especially as we are so close to new all-time highs. Round numbers on major averages attract investor attention. That attention normally brings in both buyers AND sellers. In this case, it looks like only buyers, with very light selling. Another continuation pattern. 3. The daily range is seeing compression during the ascent, as witnessed during the past two trading days. Another continuation signal. What makes this pattern so attractive from a trading perspective is that we have the S&P cornered here from a behavioral perspective. We know that this low volatility ascent should culminate in either further low volatility upside OR an expansion of volatility on the upside to quickly reach the 3500-3600 level, which I outlined as an upside target for the S&P by August 15th some weeks ago. Should the S&P suffer a range expansion on the downside, then we immediately know that something is wrong, allowing us to hit the eject button with minimal...
Weekly Note Preview: A Transitional Period Ahead; Buying Mystery; A Great Long-Term Asset and Short-Term Liability In the NDX….
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 10 page note we discuss: The potential for a transitional period in the market Buying mystery and selling history A great long-term asset in the NDX A great short-term liability in the NDX The pattern forming in the S&P 500 Zillow and Redfin A review of a potential new earnings play this week 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: False Signals Abound; What True Market Sentiment Actually Reveals; Probability Scenarios This Week
What follows is an excerpt from 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 16 page note we discuss: The prevalence of false sentiment and technical signals What true market sentiment actually reveals The striking relationship between gold/S&P 500 and what it says about market action this coming week A high probability and low probability market scenario for the week ahead A new earnings play What to expect from TSLA after earnings Another look at The Great Migration cycle MARKET UPDATE From the time this rally kicked off in March, there has been a weekly chorus of false sentiment, technical and economic indicators that have successfully done their duty in throwing investors off the scent of the market, rendering their capital useless as it sits parked in cash or hedged to the point of absurdity. Some four months later, nothing has changed. Instead of seeking points of advantageous participation/allocation into this rally, an overwhelming majority of investors are looking at when it will end. Even the most bullish among us do not believe this rally can last for much longer than the next few months. In the face of the greatest act of global central bank liquidity injections, fiscal stimulus packages and a massive transformation of society as we know it, investors are focused on the same data that has caused them perpetual misery since the 2009 lows. That is backward looking fundamental, macroeconomic data points. While the misery of the current state of affairs is very real, it is also the type of common sense, in your face data that the market uses to not just run, but sprint through the wall of worry it builds, as the market looks ahead to different data points that have yet to revealed through conventional measures. Put simply, what is obvious will always be obviously wrong. The greatest threat that investors face in the current market is not missing the top, suffering through another repeat of the March virus crash. The greatest threat investors face has been and continues to be getting bearish early on a market that has done nothing other than demonstrate extreme consistency and momentum. All it took was two 1% down weeks in the Nasdaq to bring out an army of top callers, bubble predictions and pessimists, calling for a steep retracement of the gains we have experienced since March. All it took was two months of the S&P 500 moving sideways through a technical zone of turbulence that had a high probability of...
Weekly Note Preview: 6 “Decreased Risk Events” That Have Taken Place Making Being Long Equities Here as Favorable as The March Lows, Perfection In The S&P 500…..
What follows is an excerpt from 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: 6 "decreased risk events" that have taken place making being long equities here as favorable as the March lows. Perfection in the S&P 500. What role the VIX will play from here moving forward. What role the SOX will play from here moving forward. The Great Mobility Cycle and how to best invest in it. TSLA earnings. MARKET UPDATE Let me begin this week's note by making a statement that may be thought of as ridiculous by some. I'll spend a majority of the time for the remainder of this note, explaining why I believe the following statement to be true. From a pure risk/reward basis, the risk/reward in being heavily long equities here is as favorable as the March lows. A certain set of developments has taken place in the markets over the past several weeks that has significantly decreased the risk of being long equities, while the reward for being long the correct sectors has increased. Decreased risk events: To view the remainder 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...