The Overbought Markets and the Wild Dance of Sentiment

[SOL]

Over the past two weeks, the SPX has exhibited minimal price action, with bullish sentiment fluctuating unpredictably. It has struggled to stay above 54 for two consecutive weeks. To signify a significant surge in market optimism, it would need to remain above 55 for an extended period and experience at least one notable spike towards 60, indicating widespread euphoria among investors.

Despite this, bearish sentiment has remained below the 30 mark for almost five months, with any drop in bullish sentiment being split between neutral and bearish camps. This suggests that investors are somewhat uncertain. Hence, the markets are unlikely to crash; any sharp pullback should be viewed from a bullish perspective.

Meanwhile, resource wars are intensifying, with cocoa prices surging and the potential builds for natural gas prices among a host of other commodities to rise. This could complicate the Fed's efforts to lower rates. China is injecting significant funds into its manufacturing sector to stimulate the economy and diversify from real estate.

However, increased output may not necessarily lead to lower costs in a resource-constrained environment. Elevated resource expenses might be transferred to consumers, leading to increased prices. This scenario could deter the Federal Reserve from reducing interest rates, potentially exerting downward pressure on many of today's high-performing stocks.

On another note, our sell targets were hit, and we partially exited PXD and KALU with double-digit gains. Our recent investment in TSLA is already yielding positive results, with a gain of about 15 points since our entry. We're working on the next update,, which may be sent out in two parts. All portfolios have been updated (full update and price update)

In short, while things will eventually turn sour, as is the case with every cycle, there is not enough evidence to warrant a crash. Hence, any sharp pullback must be viewed through a bullish lens.

[jonnyfrank]

How can TLT/TMF go up if the Fed continues to struggle with hitting that 2% inflation goal and increased price pressure from a commodity bull market? Can TLT/TMF actually go up if rates stay around 4.25 or go up? Any insight appreciated. Thanks.

[Investor87]

This is pretty unscientific but... Joe Biden is struggling and needs all the help he can get to be reelected. An upward moving stock market will help him and a crash before the presidential election would hurt him. I think that no major downturn will happen before November 11th. We will see.

[scott]

This is pretty unscientific but... Joe Biden is struggling and needs all the help he can get to be reelected. An upward moving stock market will help him and a crash before the presidential election would hurt him. I think that no major downturn will happen before November 11th. We will see.

Intuition sometimes out bodes logic, perhaps especially when logic is lacking. We shall see. King dollar must not be dethroned or the US national debt might/could/will turn into a Japan scenario.

[SOL]

This is pretty unscientific but... Joe Biden is struggling and needs all the help he can get to be reelected. An upward moving stock market will help him and a crash before the presidential election would hurt him. I think that no major downturn will happen before November 11th. We will see.

All signs are indicating a swift pullback in the market. However, the depth of this pullback is another matter altogether. If the SPX were to drop 300 points over two weeks, there would be a significant outcry, even though such a move wouldn't really qualify as a pullback. Despite this, sentiment indicators are not signalling a crash.

Looking further ahead, the longer-term outlook isn't overly optimistic, but it's important to remember the adage that markets can defy logic for longer than traders can remain solvent. We're closely monitoring markets like Uranium, which are showing minimal signs of correction, but our indicators are pulling back and this suggests a massive move is in the works. Similar developments are occurring in several other markets as well. What's happening in the uranium market may foreshadow the broader market's behaviour. Therefore, while we anticipate a pullback, it's unlikely to be severe due to the absence of Key factors, one of which is sentiment.

[AstuteShift]

This is pretty unscientific but... Joe Biden is struggling and needs all the help he can get to be reelected. An upward moving stock market will help him and a crash before the presidential election would hurt him. I think that no major downturn will happen before November 11th. We will see.

All signs are indicating a swift pullback in the market. However, the depth of this pullback is another matter altogether. If the SPX were to drop 300 points over two weeks, there would be a significant outcry, even though such a move wouldn't really qualify as a pullback. Despite this, sentiment indicators are not signalling a crash.

Looking further ahead, the longer-term outlook isn't overly optimistic, but it's important to remember the adage that markets can defy logic for longer than traders can remain solvent. We're closely monitoring markets like Uranium, which are showing minimal signs of correction, but our indicators are pulling back and this suggests a massive move is in the works. Similar developments are occurring in several other markets as well. What's happening in the uranium market may foreshadow the broader market's behaviour. Therefore, while we anticipate a pullback, it's unlikely to be severe due to the absence of Key factors, one of which is sentiment.

Everyone is in a state of agitation so it’s good news for the astute.

As Soros would mention, the best money skill is stay in the bubble until the perception changes which then dictates the so called facts lol

What remains interesting is to see how bitcoin behaves currently, since it’s essentially a liquidity release valve indicator in a way. If bitcoin leads to mania then markets can remain overextended for quite some time.

However that crypto space has a ton of bad actors calling for the moon so perhaps a breather is quite needed

Palladium is so good, no one is talking about it!

[Expert]

Hopefully, Sol feels better soon.

I did have a question about bonds, and TLT.
The market update from Dec 2023 mentioned that there was a positive divergence signal in bonds and that bonds have now sent a clear signal for an extended rally, and that the logical course of action is to embrace all medium to strong corrections with gusto.
However, in the more recent update, it was mentioned that you don't expect treasuries to undergo a sustained bull run (18 months or more), but that you do expect a strong counter-rally.
But, I've also noticed that the exit targets for TLT has not changed.
So, has the overall picture for bonds changed significantly between the updates?

[Budge]

This is pretty unscientific but... Joe Biden is struggling and needs all the help he can get to be reelected. An upward moving stock market will help him and a crash before the presidential election would hurt him. I think that no major downturn will happen before November 11th. We will see.

All signs are indicating a swift pullback in the market. However, the depth of this pullback is another matter altogether. If the SPX were to drop 300 points over two weeks, there would be a significant outcry, even though such a move wouldn't really qualify as a pullback. Despite this, sentiment indicators are not signalling a crash.

Looking further ahead, the longer-term outlook isn't overly optimistic, but it's important to remember the adage that markets can defy logic for longer than traders can remain solvent. We're closely monitoring markets like Uranium, which are showing minimal signs of correction, but our indicators are pulling back and this suggests a massive move is in the works. Similar developments are occurring in several other markets as well. What's happening in the uranium market may foreshadow the broader market's behaviour. Therefore, while we anticipate a pullback, it's unlikely to be severe due to the absence of Key factors, one of which is sentiment.

Just noticed the date on this. Omen?

Get better. We need you before the next pandemic hits!

On my first run through the latest MTU: "Under such circumstances, the likelihood of a crash is extremely low unless there is a significant black swan event."

I would qualify that by saying there are so many black clouds circling that maybe it's flocks of black swans. And that's my glass half full assessment.

[jonnyfrank]

I noticed one of the charts used in the latest update was the chart for TLT (although not labeled as such), which was used to illustrate a favorable chart pattern.

While I am still learning about the treasury bond market, I am concerned that with the PCE data and lingering stagflation that perhaps the charts simply don't apply to the bond market, and that TLT will flounder even more. Any thoughts or insight on this? I own some TLT and TMF and am struggling to justify holding it for much longer due to the Fed's lack of a game plan with rates. It would seem to me that the FED needs to do something to help manage the government debt, right?

[Budge]

I was able to take advantage of GBTC and the bitcoin swing for 130k in profit.

Now, I’m just sitting in cash. Daily and weekly charts don’t look good whatsoever on crypto. In terms of price prediction, 40k seems reasonable to flush out the speculators. Chasing now is a recipe for disaster and that’s not what I do and neither does SOL

Patience and discipline is paramount.

I see perhaps a short term rotation into the old economy such as oil good for possible gain but it’s limited

I do not see a bear market since many are still traumatized from 2022 and are hedged positionally for macro type events. The market loves to do the opposite

So at the end of the year I see the market go higher after significant volatility.

So what do you do at this time? Buy your favorite stocks that are oversold and relax.

Note today from Jeff Benjamin at etf.com on GBTC:

"Grayscale Investments this week announced the sudden departure of Chief Executive Officer Michael Sonnenshein, who will be replaced by Peter Mintzberg, the current global head of strategy for asset management at Goldman Sachs.

For anyone outside Grayscale’s executive boardroom or C-suite, it would be difficult to attribute the executive turnover to anything beyond the $17.6 billion that has flowed from the flagship Grayscale Bitcoin Trust ETF (GBTC) this year.

GBTC had about $26 billion in assets under management just before winning SEC approval to convert to a spot bitcoin fund on Jan. 10. It still has about $18 billion in AUM, which would look worse if not for bitcoin's massive price surge this year.

The loss of assets has resulted largely from its 1.5% fee, the highest among the 11 fledgling products and more than 12 times the expense ratio of the iShares Bitcoin Trust (IBIT).

Grayscale executives have certainly noticed the contrast between IBIT attracting more than $15.7 billion since Jan. 11—the most among spot bitcoin ETFs.

Maybe the bigger question is why investors are sticking with GBTC when the alternatives are a fraction of the price."

By Jeff Benjamin

[MarkD]

Gubmint Sachs to the rescue!

[MarkD]

https://alt-market.us/global-instabilit ... urce-grab/

https://ibb.co/G35DYMF