‘Evidence Of A Struggle’

To minimize risk, you need to position at the psychological extreme.

That’s not necessarily the top or bottom of a move, but it could be.

At Opposite Ends

From a trading standpoint, this past week saw a lot of activity.

Trades entered, exited, some re-entered, some, not.

The net result was two positions in separate, non-correlated markets.

One was shorting the SOXX, via SOXS, the other, adding to longs in Natural Gas via UNG (not advice, not a recommendation).

Fake, Fraud & Thought Shaping

By far the main hysteria is in AI, and its cohort, the semiconductors, SOXX.

From my first trade way back in the spring of ’87, to now, I’ve never seen a mass psychosis mania, fueled by propaganda, lies and made-up numbers, like this.

One can only guess where or when the shoe will drop that starts the whole (mind-shaping) scheme unraveling.

Evidence Of A Struggle

When price action pushes above or below established resistance or support, it’s at The Danger Point®

When that happens, depending on the action itself, the risk of being wrong (on an opposing position) is lowest.

The SOXX may be there now.

Semiconductor SOXX, Hourly Chart

It’s clear, a battle’s going on between bulls and bears at resistance (blue line).

Just before, during, or just after a holiday week tend to be pivot points in the market.

Said many times on this site, the most famous of these was September 3rd, 1929, the Tuesday following the Labor Day Weekend.

That was the all-time high, just before the crash.

Positioning

There are two positions open, each with a tight stop (not advice, not a recommendation)

Long UNG; Hard Stop @ 6.93

Long SOXS (short SOXX): Hard Stop @ 8.97

Now, we wait.

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