Interim Update May 3, 2024

[SOL]

This week, bullish sentiment in the market saw a slight uptick, though not significant enough to alter the overall landscape. Currently, the bullish sentiment reading stands at 37, still below its historical average of 38.5.

In simpler terms, while there may be a sense of fear of missing out (FOMO) in certain sectors, this isn't widespread enough across the broader market to indicate a potential crash. However, remember our earlier observation: this temporary market dip will reinforce the belief that buying into market dips is always profitable, which isn't the case. We'll explore this further when bullish sentiment rises to 55 or higher.

The overall trend in the markets is currently corrective (but still bullish), and for the eager beaver bullish investors, it seems like a proverbial bottom has been reached. In our view, if the S&P 500 (SPX) doesn't decline towards the 4800 level, we won't find it worthwhile to trade most indices using regular or leveraged ETFs. Therefore, we will simply continue doing what we are doing presently and focus on oversold individual stocks such as AAPL, TSLA, VALE, etc

As for the Dow Jones Industrial Average (Dow), ideally, a drop to the 36,000 range would be preferable, but that might be too optimistic. A more realistic target would be a test in the range of 37,000 to 37,300.
TLT has rebounded from its lows in 2023, reaching around the 100 range, after which we predicted a pullback as the initial breakout was expected to falter. As anticipated, it dipped into the 90 range, and overshot, which is to be expected in this environment. The first signal of renewed strength would be a weekly close at or above 92.60; this would pave the way for a test of the 99 to 102 range. A monthly close at or above 99 would open the path for a further rise towards the 120 range.

There's significant manipulation happening in the Palladium markets, and to an extreme degree. Russia could become weary of this manipulation and might consider halting or significantly restricting palladium sales as a consequence. The futures market, being thinly traded, makes this market particularly susceptible to such manipulation. While we're not making predictions about specific outcomes, given the current situation and Russia's more assertive role, it's prudent to keep all options on the table. The "Russian bear" is in hunting mode.

The next update will be sent over the weekend and may be divided into two parts.