Market Update 4/24/2024
Latest recap:
The Pullback Of 2024 - April To May [Bounce time!]
META Earnings & Durable Goods In The Focus Today
Market Sentiment: Fear remains, so stay cautious!
S&P 500 Levels - S: 5104 or 10MA; R: 5180 or 20MA/50MA
MY BULL/BEAR RATIO: NEUTRAL BIAS
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The Pullback Of 2024 - April To May [Bounce time!]
Yesterday the markets continued to bounce/rally hard, primarily driven by worse than expected FLASH PMI economic data. While the manufacturing PMI data suggests contradictionary conditions, the services PMI data is still above it but with the tendency to hit contractionary conditions soon as well.
The bad economic data was good for equities as it would suggest the Federal Reserve to think about cutting rates in 2024 again to save the economy from a reccession.
Markets were also cheering the fact that Washington passed the up to $100 billion aid package to prolong the proxy war in the Ukraine against Russia and to support Israel and Taiwan, respectively. So much for the world peace.
What is really the criminal part of this bill - Washington wants this hopeless war in Ukraine to continue by all means; of course for their own geopolitical agenda and also because it pays out twice: Senator and Ultra-Neocon-Hawk Lindsey Graham stated multiple times already that this is best investment ever made by the US as Russian soldiers are dying, military equipment is getting destroyed while US soldiers are not actively involved. On the other hand, the money that is given is basically going almost 100% into the US military industrial complex (MIC) that strenghtens the US economy and pays the management/donors big fat salaries and bonuses.
So new world order achievements by weakening competitors (e.g. Russia) while boosting its economy (MIC) and enriching party donors is what is really behind this and all previous bills, nothing else.
Before I forget - where is this $100 billion coming from? Of course from the Federal Reserve bank! It has to come up for the bill which only means higher inflation in the future! And this will negatively effect the middle and lower class in America! So these are the real losers!
Before Tesla reported its earnings yesterday, I was highligting in the newsletter that Tesla’s stock was primed either to skyrocket to $157 per share or to plunge to $127 per share, depending on the company guidance. Lets face it, we knew this earnings report would be bad thats why the share price massively dropped over the last weeks.
And when finally the earnings were released, the poor expectations for the last quarter were fully satisfied - all bad news (increased competition, lower margins, less revenue, less orders etc.) were priced in already. As a result of that, the share price started to spike in the after-hours. But the spike was only to substain if CEO Elon Musk would tell investors and Wall Street analysts something good about the future too. And he delivered it! Elon said that the company aims to start production of affordable new EV by early 2025! This was the news the Tesla bulls were waiting for as it suggests that Elon will continue to streamline processes within the facilities and to increase efficiency and productivity paired with lower costs on material purchases during times of high inflation. As a result of that comment, Tesla’s share price accelerated to spike up to $164, up by 13% from the closing price!
META Earnings & Durable Goods In The Focus Today
Today we will get durable goods data updates that will give us an indication on how business activities are doing. Same scenario as with the Flash PMI data from yesterday - If numbers coming in hot, its going to tank the markets as it will strenghten the Fed case to maybe even initiate another rate hike rather than keeping rate higher for longer now that inflation is roaring back. On the other hand if numbers coming in as expected or better cooler, markets likely continue to rally!
At the end of the trading session today, we will get a mass of earning reports but the most important will be that one from mega cap stock and big tech company “META”. Meta has strongly benefited from Virtual Reality services, the AI integration in Ads and Social Media apps overall and the looming TikTok ban in the US, the strongest competitor.
So the growth story appears to be still intact and that is why the share price has been systematically appreciating even though we are dealing with higher inflation and tighter financial conditions. Last share price is 496 and according to its implied volatility, it could either jump to 537 or crash to 455 by tomorrow!
Market Sentiment
Market fear remains and selling the rallies too. But watch out traders, rallies can be quiet hard and even lasting for some days during downturns!
Live S&P500 Futures - Pre-Market Analysis
So yesterday the S&P500 managed to get above the 10MA resistance that now has become support. But nothing has changed to my scenarious that I outlined yesterday to determine the next market move. So here it is:
The big question now is will this “rally” continue and maybe even form a “V-Shape” recovery, meaning to make it back to the ATH level at 5323/5300 or will the S&P500 continue with its downtrend to the next pullback target at 4808/4800?
The major bear (pullback continuation) case is when we see the 20/50MA to deathcross while we also reject at the 20MA.
The bear case even accelerates if we get rejected at the 10MA in this week.The major bull case (V-Shape Recovery) is when are breaking through the 20MA resistance.
In other words, the dead cat bounce theory is still intact as long as the S&P is not breaking through the 20MA resistance!
Levels to watch S: 5104 or 10MA; R: 5180 or 20MA/50MA
Pro Bullish:
New ALL-TIME-HIGHs!Bullish momentumAt the daily 20MAAbove the daily 10MA, 100MA, 200MA
Above the weekly
10MA, 20MA, 50MA, 100MA, 200MAAbove the monthly 10MA, 20MA, 50MA, 100MA, 200MA
10/20MA daily goldencross10/50MA daily goldencross20/50MA daily goldencross
20/100MA daily goldencross
50/100MA weekly goldencross
Strong Fourth Quarter of 2023
Strong First Quarter of 2024
Strong January Month of 2024
Strong February Month of 2024
Strong March Month of 2024
Price Target: 5,100-5,200 ACHIEVED (Wall Street Consensus for 2024!)
NEW Price Target: 5,500 (Oppenheimer Wall Street Bank March Update)
NEW Price Target: 5,700 (Fundstrat's Tom Lee April Update)
Blow-Off Top: 5,500-6,136
Pro Bearish:
Market is rolling over
Long-term trendline break confirmed!
Weak April month
Wall Street’s 5100 price target for the year 2024 already achieved!
Wall Street’s 5200 price target for the year 2024 already achieved!
Market Sentiment was at EUPHORIA level
Below the daily 10MABelow the daily 20MA
Below the daily 50MA
10/20MA daily deathcross
10/50MA daily deathcross
20/50MA daily deathhook
Weakening bullish momentum / Bearish momentum
Potential bearish head and shoulders pattern
Geopolitical Risk: Middle East Crisis / Ukraine Crisis
Currency Risk: Japan’s Yen Currency, US-Dollar crisis looming/happening
PULLBACK PT: 4,808-4,980
MY BULL/BEAR RATIO: NEUTRAL BIAS
Thanks for reading my newsletter!
Have a happy trading day!
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