The Plug, Has Been Pulled

Markets reverse in a typical way; first is ‘sentiment’, then ‘volume’, then ‘price’.

According to this link, looks like we have sentiment aplenty; evaporating sentiment, that is.

As stated by Mr. Fred Hickey, VC (Venture Capital) funding peaked last year and has dropped over 75%, since then; that’s the ‘sentiment’ part of the equation.

A partial synopsis of his interview, in the link above:

Time Stamp:

9:15, The greatest bubble I’ve ever seen

11:15, It’s all happened before

11:40, Narrowing market

11:55, Volume decline

16:30, Honeymoon phase is over

17:50, VC spending down 75%

18:05, Everyone knows it’s a joke (except, Wall St.)

And on it goes …

Where’s The Top?

From a Wyckoff perspective, using his analysis (here and here) as a basis of speculation, that’s the wrong question (not advice, not a recommendation).

If we’re expecting some kind of massive reversal (which we are), then the objective is to look for the weakest sectors, not the strongest.

Frequent users of this site already know that work’s been done. One of, if not the weakest sector(s), is Biotech (not advice, not a recommendation).

Is Today, The Day?

With that said, as this post is being created (1:20 p.m., EST), the sector at the center of bubble attention, the SOXX, may have just completed a wedge ‘throw-over’.

Semiconductors SOXX (ETF), Daily

Any number of scenarios can be in play.

At this point, the SOXX, may be in the process of validating the terminating wedge (not advice, not a recommendation).

As Fred Hickey said, it’s the biggest bubble he’s ever seen.

By the time it becomes obvious, it’s way too late for (low-risk) positioning.

Stay Tuned

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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.

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