Peculiar Sentiment Data and Upcoming Update

[SOL]

We've received an unexpected 150% data influx as some new sources started to deliver earlier than anticipated. Oddly, sentiment data readings have dipped further, which is unusual at this stage. We're double-checking to ensure the additional data was correctly tabulated in the initial run. If the previous figures hold true, the current bullish sentiment reading stands at 37. Such low readings rule out the possibility of a very strong pullback, which leaves us with two potential outcomes/possibilities:

A pullback limited to the extremely overbought stocks, which would fall under the category of a silent correction as other players are likely to replace the current leaders, or a swift, sharp pullback that, although appearing severe in the short term timelines, would at most fall within the normal to mild range.

I also had to take an unexpected last-minute trip, which contributed slightly to the delay. However, the main factor is the new batch of sentiment data. It's significantly larger than the last batch we processed, so I want to double-check to ensure we didn't make any errors.

The next issue will contain several new plays, and we will have reviewed approximately 12 of our holdings.

If the next sentiment data also leans towards the lower end, we'll send a weekend wrap following this update.

As soon as we finish re-verifying the next batch of data, we will send out the update.

[MarkD]

CORP BOND ADVANCE DECLINE THROUGH EOW 1-26-24

https://ibb.co/YkL1L6L

[Expert]

I'm sure you've already considered and thoroughly investigated this, but is it possible for sentiment data to be manipulated?
I remember a couple years back, one of the Market Updates had mentioned that sentiment data was being tampered with, at that time.

[SOL]

I'm sure you've already considered and thoroughly investigated this, but is it possible for sentiment data to be manipulated?
I remember a couple years back, one of the Market Updates had mentioned that sentiment data was being tampered with, at that time.

Data manipulation began intensifying around 2009, escalating dramatically in the wake of COVID. It's a reality we must now live with. Yet, based on mass psychology, there will come a time when the majority will struggle to discern between authentic and fabricated data. Astute observers may detect discrepancies, but their insights will go unnoticed as the masses will base their decisions on manipulated data. In a tragic twist of fate, this distorted information will have the same impact as the truth. We are dangerously close to this inflexion point
.

[SOL]

Our preliminary calculations indicate bullish sentiment readings are set to surge. So far, 65% of the new batch of data has been tabulated. Even a sentiment reading of 50 represents a significant jump from last week's figure of 37, though I suspect it could reach as high as 52.

However, suppose this sentiment continues to fluctuate without remaining at elevated levels for weeks on end. In that case, it will signal extreme volatility, which is usually a precursor to the downfall of many former high performers ( High Tech and AI come to mind).

It's too early to delve deeper at this stage; it is worth noting that a large swath of investors believes that a range of stocks, mainly those centred around AI, are immune to market crashes. This conviction, however, is dangerous in the long run, as no investment is truly safe from market corrections or crashes.

In summary, until bullish sentiment remains at high levels for several consecutive weeks, this Yo-Yo pattern is indicative of increased volatility. It serves as an initial warning that many overbought sectors will likely undergo significant corrections.

[Budge]

Our preliminary calculations indicate bullish sentiment readings are set to surge. So far, 65% of the new batch of data has been tabulated. Even a sentiment reading of 50 represents a significant jump from last week's figure of 37, though I suspect it could reach as high as 52.

However, suppose this sentiment continues to fluctuate without remaining at elevated levels for weeks on end. In that case, it will signal extreme volatility, which is usually a precursor to the downfall of many former high performers ( High Tech and AI come to mind).

It's too early to delve deeper at this stage; it is worth noting that a large swath of investors believes that a range of stocks, mainly those centred around AI, are immune to market crashes. This conviction, however, is dangerous in the long run, as no investment is truly safe from market corrections or crashes.

In summary, until bullish sentiment remains at high levels for several consecutive weeks, this Yo-Yo pattern is indicative of increased volatility. It serves as an initial warning that many overbought sectors will likely undergo significant corrections.

Re: DJI, I see negative RSI divergence for daily, monthly and quarterly charts. For NDX, I see negative divergence in all four periods. Hmm.

[SOL]

Re: DJI, I see negative RSI divergence for daily, monthly and quarterly charts. For NDX, I see negative divergence in all four periods. Hmm.

Reflecting on the current situation in 2024 invokes memories of the 2008-2009 crash; in reality, it began in late 2006 to early 2007. Signs of trouble emerged with massive negative divergences in 2007; strong indications that something were amiss started roughly towards the end of 2006

However, the partying persisted until 2008, as few paid attention – correction, no one wanted to pay attention until circumstances forced them to, when things turned downright ugly. Many resisted and grew indignant if you dared to assert that the festivities were ending, likening it to the Titanic facing its colossal iceberg.

Now, the focus has shifted from housing to AI. The story/theme remains unchanged – the storyline persists, only the characters evolve. The notable difference is that AI, we believe, is destined to undergo three cycles of boom and bust.

The only missing ingredient is the psychological sentiment, and when that aligns with the narrative, the proverbial house of cards………, well, you know what happens next.

[Budge]

Re: DJI, I see negative RSI divergence for daily, monthly and quarterly charts. For NDX, I see negative divergence in all four periods. Hmm.

Reflecting on the current situation in 2024 invokes memories of the 2008-2009 crash; in reality, it began in late 2006 to early 2007. Signs of trouble emerged with massive negative divergences in 2007; strong indications that something were amiss started roughly towards the end of 2006

However, the partying persisted until 2008, as few paid attention – correction, no one wanted to pay attention until circumstances forced them to, when things turned downright ugly. Many resisted and grew indignant if you dared to assert that the festivities were ending, likening it to the Titanic facing its colossal iceberg.

Now, the focus has shifted from housing to AI. The story/theme remains unchanged – the storyline persists, only the characters evolve. The notable difference is that AI, we believe, is destined to undergo three cycles of boom and bust.

The only missing ingredient is the psychological sentiment, and when that aligns with the narrative, the proverbial house of cards………, well, you know what happens next.

Heard some wag who suggested every novel could be improved by replacing the second sentence with: "And then the murders began!"

I think for 2024, we could instead use: "And then the wars began!"

I think we need to keep an eye on money flows. Those in the know will start shifting vast sums around.

[MarkD]

Sol

What type of pullback are you anticipating in the Russell 2K? I see possible support at 1800-1850, then 1750-1775.

Thanks!

[Expert]

PALL is now at a 52 week low. In a Market Update from a few months back, I remember that you had mentioned that PALL is close to triggering an MOAB. Is it now at that point?

[SOL]

PALL is now at a 52 week low. In a Market Update from a few months back, I remember that you had mentioned that PALL is close to triggering an MOAB. Is it now at that point?

The MOAB (Mother of All Buys) signal can be "a royal pain in the butt"; the same holds true for the FOAB. It's challenging because even when it's 99 per cent of the way there, you can't declare it a buy. It hasn't yet triggered a signal, but remember that many excellent opportunities never triggered one. An insanely oversold market doesn't need to trigger one to trend higher. However, if it does trigger one, it significantly improves the outlook.

[SOL]

Sol

What type of pullback are you anticipating in the Russell 2K? I see possible support at 1800-1850, then 1750-1775.

Thanks!

Until bullish sentiment consistently exceeds 56 for an extended period, technical analysis won't yield immediate results. Take a look back at 2008-2009. Based on technical analysis, the sell signal appeared in 2007, and some could argue even as early as late 2006. And it took at least a year to yield results.

So, using IWM as a reference, I don't foresee a move below the 162 to 169 range for now.

We're processing sentiment data more frequently these days. Interestingly, this will be the second week where bullish sentiment exceeds 50. We're still processing the data, but so far, it seems likely to fall within the 50-52 range, still short of 56.

[MarkD]

Thanks for the update!