Monthly Archives: July 2023

There’s A ‘Hole’ In The SOXX

July 18, 2023 By in Dr. Elder, Semiconductors, SOXS, SOXX, TSM, Wyckoff 1 Comment

Count of The Fibonacci

While the media’s wasting no time setting up the average investor, for a ‘guaranteed skinning’ (as Dr. Elder used to say), providing an environment of constant, incessant, AI ‘get-in-now’, buy recommendations.

With that said, an ominous market sign has appeared.

As the daily chart of SOXX shows, we either have a breakout or a hole that’s about to be filled (reversed).

Semiconductor Index SOXX, Daily

In technical terms, the SOXX is in Wyckoff ‘Up-Thrust’, reversal position (not advice, not a recommendation).

A tick lower in MACD, confirms the bearish divergence.

Then, there’s Fibonacci

Enter, The Count

When markets are in a mania, reaching insane extremes, it allows for a (more) clean print of either Fibonacci retrace levels or time correlation.

Decide for yourself if that’s the case now.

Remember, tomorrow (Wednesday) is the 19th, and one day before Taiwan (TSM) releases earnings.

That release is scheduled for the 20th before the open.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

BridgeBio … Buy or Sell ?

July 17, 2023 By in $SPSIBI, BBIO, Biotech, LABD, Positions, SPBIO

Or … Just Another ‘Pump & Dump‘

Seems like anything related to the heart is all the rage these days.

‘Protein‘, Anyone?

So, it is with BridgeBiopharma (BBIO), currently the number three in market cap on the S&P biotech Index, SPBIO.

The daily chart shows the extent of the day’s move.

BridgeBiopharma (BBIO), Daily

Note that price action did NOT gap above resistance but pushed up to that area during the session; backing off (slightly) before the close.

Correspondingly, the leveraged inverse fund LABD had a rough day in the early session.

However, that down move was already starting to erode before the close.

Biotech Leveraged Inverse LABD, Daily

The blue arrow shows price action closed well off the lows (blue line).

Tomorrow, there are a number of data releases scheduled, link here before the open, then during the early session.

Expectations

While still maintaining a short position via LABD (not advice, not a recommendation), the expectation is BBIO, has the garden variety pump-and-dump.

We’ve all seen this movie before … right?

That is, completion of a ‘trial’ is a long way from ‘approval’ and then manufacturing start-up.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Fibonacci, Force and Biotech

July 12, 2023 By in $SPSIBI, LABD, Positions, SPBIO, The List, The Speck, Wyckoff, ZeroHedge

Waiting For The ‘Event Horizon’

We’re going to start first, with this link, presenting the on-going fundamentals of the sector.

For those of us literally pulling their hair out, wondering if the dam is ever going to break, we have this link.

‘We’ve just poisoned 5-Billion people …’

Note: The dam break is the ‘event horizon’ where everyone collectively wakes-up. Once that happens, the ‘conspiracy’ has been proven as undeniable fact.

Biotech SPBIO, may or may not have an absolute direct connection with the aforementioned links but it’s the ‘baby with the bathwater’ response that’s expected.

Adding to that, big players in this sector have no P/E

The top-ten weightings keep changing, but the last time it was checked, none in the top-ten, had a P/E.

Since we’re working the short side, it’s the leveraged inverse fund LABD that’s of interest.

Biotech Leveraged Inverse LABD, Daily

Note the near perfect Fibonacci time correlation.

As of today’s close, price action on the LABD has got itself into a Wyckoff ‘spring position’ having decisively penetrated support (blue line), shown below.

That spring set-up has been accomplished on weak down-thrust when compared to the prior move lower.

We have a high probability of upside reversal, down for SPBIO (not advice, not a recommendation).

Positioning

Stated in the prior update, we’re short this sector (long LABD) and now have Hard Stop @ LABD 13.27 (not advice, not a recommendation).

Update: 7/13/23, 2:51 p.m. EST

LABD price action pushed to 13.26, just 0.01, below the above listed stop and is now moving higher.

Trade has been maintained (not advice, not a recommendation)

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

SOXX … The ‘AI’ Wedge Higher

July 11, 2023 By in $SPSIBI, Biotech, DWCINL, LABD, Life Insurance, Positions, Semiconductors, SOXS, SOXX, SPBIO 1 Comment

Last Gasp Before August 23rd?

The SOXX chart pattern (below), is telling us we’re likely in a case of …’buy the rumor, sell the news’.

Yesterday’s action may have negated any immediate reversal downward.

Now, it looks like we’re going into a terminating wedge targeting SOXX higher to approximately 550 – 560 (not advice, not a recommendation).

Of course, anything can happen.

Semiconductor SOXX, Daily

Note, the potential for a bearish MACD divergence if SOXX moves to new highs.

If we thought there was hysteria now, just think what’s it’s going to be like if SOXX breaks to the upside.

Party, like it’s 1999

Then, Biotech SPBIO

Meanwhile back at the ranch, with about a half-hour to go before the regular session, biotech leveraged inverse LABD, is hovering at yesterday’s lows.

Biotech SPBIO, Leveraged Inverse LABD, Daily

Support (blue line) has been penetrated.

Price action has stopped dead … thus far.

This sector has been the downside leader (LABD, higher) in the past so, we’ll see if that’s happening now.

The ‘Life Insurance’ Correlation

There appears to be correlation with potential downside reversal in biotech and possible downside reversal in the life-insurance sector.

We’ll discuss that in another update.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Is Biotech (Short) Back?

July 10, 2023 By in $SPSIBI, Biotech, LABD, Positions, SPBIO, The List, The Speck, Wyckoff, ZeroHedge

First, The SOXX Housekeeping

Biotech Sector SPBIO ($SPSIBI) has got itself into a Wyckoff Up-Thrust (reversal) condition but first, we’ll update the SOXS trade.

A discretionary exit was made during this session at SOXS 10.10, for just over 1% profit (not advice, not a recommendation).

The trade was in the green and not going to be allowed to go red … a simple, but difficult to execute, trading rule.

We’re still in a bubble. That has not changed. So, it’s being watched closely.

Meanwhile, biotech SPBIO ($SPSIBI) reversed on June 14th and has been edging lower ever since. Today, we have what looks to be an up-thrust condition.

Price action has penetrated previous resistance and stalled (thus far).

Since our interest is to short the sector, we’ll go straight to the leveraged inverse fund LABD.

Biotech SPBIO, Leveraged Inverse LABD, Hourly

With about an hour before the close, price action’s penetrated support and has slowed significantly.

Positioning:

LABD entry @ 13.8766; Soft-Stop and Hard-Stop might be at the lows for the day (not advice, not a recommendation). More on that, later.

Fundamentals

The drivers for potential downside continue to grow.

Scenes like this have now entrenched themselves into the public arena.

As stated, many times (in the opinion of this author), these events are the primary driving force for all market activity on a go forward basis.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

ChatGPT, Tops-Out

July 8, 2023 By in AVGO, NVDA, Positions, Semiconductors, SOXS, SOXX, TSM

And With That, It’s Over

The ChatGPT craze lasted just long enough to ramp Nvidia and the SOXX, to stratospheric levels.

In the coming weeks and months, we’re likely to see who ‘cashed-in’ (a la Elon Musk) and for how much.

When a bull market nears the end of its lifecycle, it tends to thin-out.

As the smaller cap stocks fall away and underperform, they’re sold and that capital’s funneled into the ‘last man standing’; in this case, Nvidia (NVDA).

Broadcom (AVGO) is there as well, but it’s a distant second at 1/3rd, the market cap of NVDA.

Short Positioning

We’re short this sector via SOXS (not advice, not a recommendation) with entries shown in the prior update.

There was a third entry on 7/6 (not shown), but it’s minimal size when compared to the others.

Now, on to the charts

Semiconductor Leveraged Inverse Fund, SOXS

The following chart has the current hard-stop progression and soft-stop (trader discretion) locations.

Moving in closer with the zoom version.

The ‘AI’ bulls are in their brain stem (un-thinking), enabled in their fantasy by articles like this one and this one.

Of course, there’s more like here and here but we get the picture.

Taiwan Semi (TSM) Earnings Date

At the time of this update, TSM earnings date was an estimate, now confirmed as July 20th, before the open.

It’s about to get interesting.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Managing The (SOXS) Trade

July 5, 2023 By in Positions, Semiconductors, SOXS, SOXX 1 Comment

The ‘AI’ Reversal

It looks a little unstable for the ‘AI’ bulls.

The top in the SOXX, was correctly identified, here.

The potential completion of the downside test and reversal was discussed, here.

After that last post, the SOXX limped higher for one day, before reversing, today.

In fact, today’s session lows took out the daily lows of the prior two sessions.

This update will be brief.

A short position (via SOXS) was initiated on Friday June 30th, then increased by 20%, this past Monday, July 3rd (not advice, not a recommendation).

Semiconductor Leveraged Inverse Fund SOXS, Daily

Entries are shown as Arrow No. 1 and No. 2

An original soft stop (trader discretion) and hard stop were given of 9.75, and 9.48, respectively.

Price action on Monday pushed through the soft stop and trader discretion was to maintain the position.

As a result of today’s action, the hard stop has been moved up to SOXS 9.54, with a soft stop at today’s SOXS low of 9.76 (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Beware … The ‘Ides’ of July

July 2, 2023 By in NVDA, Positions, Semiconductors, SOXS, SOXX, TSM 1 Comment

Well, July 13th, Actually

Thursday, July 13th, is when Tiawan Semi (TSM) is scheduled to release its earnings.

At this point, the date is still an estimate as this link says it could be as late as the 19th.

Either way, we’re going to find out (very soon) if there’s any correlating support for Nvidia’s ‘fantasy‘, $11-Billion.

The historic chart for NVDA (since 1999), shows an incredible rise that has apparently reached a climax top.

That climax is shown by the ‘off-the-chart’ reading of Force Index; never before seen in the 24-years, a near quarter century of trading history.

Nvidia, NVDA Daily Chart, Historical

Moving closer in on the daily, we see the magnitude of the thrust higher.

The gap has been labeled ‘exhaustion’.

That premise is supported by the fact of immense thrust (and volume) higher.

Exhaustion means just that; it can’t be sustained (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

‘Show Me The Money !’ … NVDA

July 1, 2023 By in GDXJ, JDST, NVDA, Positions, Semiconductors, SOXS, SOXX, The Maverick of Wall Street 3 Comments

Waiting, For August 23rd

From a strategic standpoint, this past Friday was the end of the Quarter and possibly the lowest risk spot to short the semis (not advice, not a recommendation).

‘Low risk’, does not mean, ‘no risk’.

We’ll look at the chart below for the SOXX, but first some housekeeping on the Junior Miners, GDXJ.

As stated in the last update, if there was more GDXJ, upside, shorts (via JDST) would be exited. That’s what happened with an overall gain of + 3.57%, on the series (beginning 6/16/23).

Now, on to the next circus … Artificial Intelligence; more specifically, NVDA and its cohort, the SOXX.

Where’s The Money?

With the quarter over, money managers have dutifully shown they’re like everyone else, ‘investing’ in AI.

That’s out of the way, so let’s move on to the specifics:

‘Hey NVDA, where’s the $11 Billion?’

Referring back to the excellent investigation done by The Maverick, in his view, the $11 Billion, is “Fantasy”.

The tricky part from a chart standpoint, is to identify when or if that fantasy is going to be exposed.

Semiconductor SOXX, Weekly (Inverted)

We’ve taken the weekly chart of SOXX, and inverted it as if going long the leveraged inverse SOXS (not advice, not a recommendation).

Downside force dissipating with each major thrust.

Last week was an ‘inside week’; price action could not make a new weekly low.

Couple that with end of quarter, potential ‘window dressing’ and this past Friday, may have been the lowest risk point, for shorting via SOXS (not advice, not a recommendation).

Analysis … not Advice

This site cannot and will not give advice.

What it can do, is provide analysis and strategy so that you can make your own determination on the market.

With that said, the ‘heads-up’ for a top in the SOXX, was posted on June 17th, link here.

Since that time, the SOXX reversed down and has now come back to test.

Positioning

On Friday, the SOXX, was shorted by entering long the inverse fund SOXS, at 10.01.

Soft stop (trader discretion) for the position is the session low at 9.75, and hard stop (no excuses exit) at all-time low of 9.48 (not advice, not a recommendation).

The coming weeks may prove interesting. All eyes will be on that ‘$11-Billion’.

Show Me The Money

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279