Interim Update September 6: Intriguing Emerging Trends

[SOL]

Bullish readings have fallen below their historical average twice since the last update. The first reading came in shortly after the last update was sent out, and the next reading was calculated around September 2nd. In both instances, these readings were below 38.5, which is the historical average. The readings were 35 and 36, respectively. This suggests that the crowd is becoming nervous quite quickly. Therefore, regardless of how significant the next pullback may be, you have only one viable option: embrace it and view it as a buying opportunity. Well, there is one more option – if you're a Mass Psychology player, then in the unlikely event of a very sharp correction, you should break out a good bottle of booze and celebrate.

Additionally, due to the fact that we are adjusting many of the entry points on the pending plays, with over 60% of them being adjusted upwards (especially for the 1st and 2nd positions), the update is taking a bit longer to complete. However, I am committing double the usual time (even though I'm trying to reduce my screen time) to ensure it is done within 24 hours or less.

In the meantime, there are some interesting developments occurring in the uranium and precious metals sectors, discussed below

Furthermore, we are planning to build a stake in MPW. This play has become compelling due to several positive developments, including the fact that over 30% of the float is being shorted, it is trading in the extremely oversold range, and it's currently trading almost $7 below book value.

Lastly, PALL has now become a long-term "screaming buy."





Uranium

The pattern in uranium is already showing extreme bullishness. However, if uranium manages to close at or above 63.85 before experiencing a pullback, we would have to categorize this pattern as exceptionally bullish. At that juncture, we will be issuing several more investment recommendations in the uranium sector.
In summary, there are just two minor confirmations remaining: one is related to price action, and the other concerns a technical development. If both of these confirmations are validated, we are highly likely to see uranium reach $120. The upward journey will be marked by volatility, but the gains are poised to be truly remarkable. It's highly likely that at least one smaller player will experience a staggering 1000% increase from their low point to their peak.

Gold and Silver

Once Gold closes at or above 2100, a significant long-term trend change is expected. As John hinted in the "Plunder from Down Under," the possibility of reaching 5000 becomes distinct. However, as with all breakouts to new highs following extended periods of inaction, it typically leads to a pullback and may be perceived by sceptics as a false breakout. If Gold can close at or above 2100, the resulting pullback should range between 1600 and 1900, with 1600 being an extreme target. If 1600 is reached, we would adopt an extremely aggressive stance.
Regarding silver, the scenario is quite similar. If Gold achieves the aforementioned milestone, Silver will pave the way for a test of the 48 and 55 range, with a potential overshoot to 72.

One factor to keep in mind is that what we've witnessed so far is primarily "MANFLATION." Artificial forces have been utilized to create the illusion of shortages through factors like war and supply chain disruptions. The next phase is real inflation, where demand will surpass supply even when all artificial influences are removed from the equation.

[jonnyfrank]

In regard to uranium and the bullish readings, should we take such readings as caution or as a buy more signal?

[bpcw]

In regard to uranium and the bullish readings, should we take such readings as caution or as a buy more signal?

Sol isn't referring to bullish sentiment readings which would be bearish but the pattern setup, probably the chart/TA.

[SOL]

In regard to uranium and the bullish readings, should we take such readings as caution or as a buy more signal?

The uranium market and bullish readings are distinct. The uranium market is poised to take off; the question is, will it happen sooner or later? If the pattern follows through, it suggests an earlier surge. Many commodities are likely to perform well, even in the presence of a stronger dollar.

While everyone is focused on BRIC currencies, the significant news is that the dollar's purchasing power will decline despite its rise. The fluctuations in sentiment suggest that the markets need a release, as the crowd is attempting to play both sides - jumping in and hopping out. Typically, this results in getting caught in market volatility.

[MarkD]

The corporate bond A/D data I maintain has dropped back to the lows of October 22.

https://ibb.co/3r8cwtV

[nicolas]

Uranium. This is where we are:
https://www.youtube.com/watch?v=zhMZb56D3IY

[Cinnamon]

I am slowly adding to my uranium list of stocks. Like Nicolas I went through extreme volatility but the long term outlook appears to be bright. Demand is rising but supplies are dwindling

[SOL]

The S&P 500 has shown minimal activity for nearly three months, and the markets are continuing to experience a churn, as we mentioned in the last update. One noteworthy point we haven't discussed before is that free-market forces ceased to exist quite some time ago. This transformation began in the aftermath of the 2008-2009 crisis, and any remnants of free-market forces were eliminated during the COVID crisis.

Today, nearly every scenario in the market is premeditated. This is due unparalleled amounts of hot money and, more importantly, the unprecedented means of controlling the population. Major players exert influence over every aspect of a small player's actions, from their Toilet routines to their consumption (food) choices.

The ongoing churning action could be seen as a positive development if technical indicators pull back into oversold territory, especially if bearish sentiment increases. Generally, when a market appears to be churning, indicators may initially suggest a mild correction, but suddenly a strong wave of selling emerges as they approach extremely oversold levels. Currently, the indicators are in the neutral range, so there's room for them to move before reaching oversold levels.

Our strategy is relatively straightforward: we are primarily waiting for bearish sentiment to rise. It would be advantageous if bearish sentiment reached 55 and coincided with the market moving into oversold ranges on the weekly charts.

For the SPX, resistance is in the 4541 range, while support can be found in the 4350 to 4380 range.

Just to clarify, our main emphasis is on monitoring the market's psychological state. We will exercise caution and invest capital cautiously in small, measured steps until we see a significant increase in bearish sentiment.

[jonnyfrank]

SOL, thank you for the words of wisdom. I have added more on the short side, while going ST/MT/LT long on PALL, MJ (lately) and GUSH. I am being cautious, but even the short stuff is moving at a snails pace. Still plenty of cash waiting....

[SOL]

Something significant is unfolding beneath the surface, and we hinted at this not too long ago when we mentioned that real inflation would become the issue. While everyone is fixated on the BRIC currency, which, in our view, is mostly a sideshow on its best day, it's essential to remember that the major players often don't highlight the true story. They tend to divert attention with other "enticing" narratives that masquerade as the real deal, particularly in an era when people focus on sound bites and bombastic one-liners.

The real story lies in the fact that nation after nation is reducing their exports of raw materials, especially crucial ones that gain more value when they are transformed into meaningful products. For instance, countries are increasingly converting copper ore into the metal and finished products, or instead of merely selling Nickel, they are insisting on having batteries manufactured within their borders, etc

Cycles are accelerating; Africa, expected to remain passive for a more extended period, is awakening faster. They, too, are gradually advocating for finished products instead of exporting raw materials. This trend is impacting every continent.

Then, there's the matter of oil. Saudi Arabia, which used to cooperate with the US, has decided not to increase oil production when the US demands it. Instead, they are getting closer to Russia, another major oil producer, and several other nations are following in their footsteps.

This means that irrespective of whether the dollar's value increases or not, the cost of goods in the West will rise. For example, Sriracha hot sauce was once selling for nearly $70 at one point. However, when we checked other countries in Asia, South America, and even Russia, people there could purchase it for $5-7. Remarkably, even in Russia, which is currently one of the most sanctioned countries globally, the price fell within this range.

One might term this development as a "Resource Value-Added Export Strategy." If this trend continues to gain momentum at its current rate, the West will have to become accustomed to buying finished or semi-finished products, and this will drive up the cost of everything.

Consider Germany now; the cost of energy is on the rise, and they are struggling to remain competitive. When you add the aforementioned factors to increasing energy costs, it becomes a matter worth contemplating.

The next phase will usher us into an era where demand and supply dynamics will take centre stage, with producers increasingly demanding higher prices for their supplies. They may even reduce production if needed to secure better terms. This is precisely what Saudi Arabia is doing, and we can anticipate that exporters of various products will adopt a similar approach. In such a scenario, the strength of currencies becomes less significant when supply itself becomes a critical concern.

Chips and AI cannot fulfil basic human needs. It's worth noting that data centres are power-intensive and, on top of that, consume vast amounts of water. This topic is extensive and complex, but I've provided enough information for you to delve deeper into it.

[langdj]

@Sol Very nice write up! What stocks would you buy for the long term under this scenario, think 3-5 years to just accumulate on dips?

I know you have suggested UEC and PALL, which I have purchased for swing trades.

[MarkD]

https://futurism.com/the-byte/lithium-f ... gest-cache

First the USA announces large titanium supply in Tennessee, now lithium. They have known all along. Just like clean coal.

The question is whether or not it will be allowed to be mined.

[SOL]

@Sol Very nice write up! What stocks would you buy for the long term under this scenario, think 3-5 years to just accumulate on dips?

I know you have suggested UEC and PALL, which I have purchased for swing trades.

Uranium looks great, Palladium is a screaming buy (the most straightforward play is probably PALL), and Copper and most commodities appear promising.

In the long term, these assets are oversold:
- Uranium
- Copper
- Palladium
- Coal
- Lithium

AI and tech stocks also show promise, but there appears to be a resource war on the horizon. Another factor to consider with AI is that top players like NVDA, AMD, etc., utilise their maximum capacity at TSM. This is forcing them to cut back on other chips and to concentrate on AI chips, which could have potential drawbacks. Time will reveal how this unfolds. However, AI stocks need to let out some steam.

Regarding the names we've mentioned several in the market update, such as NXE, VALE, CLF, FCX, etc., we will be providing additional investment opportunities in the uranium and potentially the coal sector. There's a lot of attention being given to renewables, and it seems that when they make noise, it's often to create long-term opportunities. These players in the market are primarily motivated by financial gain and don't prioritise other factors.

[SOL]

https://futurism.com/the-byte/lithium-f ... gest-cache

First the USA announces large titanium supply in Tennessee, now lithium. They have known all along. Just like clean coal.

The question is whether or not it will be allowed to be mined.

We have plenty of natural resources in the United States, but here's the crucial question: Do we have the right people to make the most of them? Opening a mine can be a long journey, but without skilled workers, it won't happen. The US is facing a labour shortage in the resource sector.

[bpcw]

Any comments on the latest sentiment readings Sol?

Quite a large jump from the bullish camp to neutral which would normally indicate uncertainty which is bullish.