The Key Lies with Past & Present

This update will show why there’s a probability for lower open, lower price action, and/or ‘island-gap-reversal’, for the SOXX, at the next session.

With the understanding that ‘anything can happen’, let’s get into the SOXX price action, along with chief cook and bottle washer, Nvidia.

Market Reversal?

First off, does anyone expect a significant reversal?

Following the breadcrumbs, here’s a link from the comments section posted during a livestream by Uneducated Economist; go to Time Stamp 23:45.

Note: The second link is not from Simon (Uneducated Economist) himself but obtained from snide remarks made to him during his livestream.

Using the timestamp, judge for yourself.

My takeaway is:

They don’t know. The amount of time wasted ‘crunching the numbers’ is mind numbing. Number crunching is easy and that’s why (nearly) everyone does it.

Reading price action (effectively) is hard and that’s why you’re here. 🙂

Semiconductors SOXX, Daily Candle

The chart highlights the ‘island-gap’ potential.

However, the real story is in the second chart, Nvidia.

Remember that markets tend to alternate. Last time, is not this time.

The last time Nvidia had a significant outside-down, it went into consolidation before moving higher.

Nvidia NVDA, Daily Candle

Looking at the chart, ‘this time’, is already different.

From the 10:1 split, to outside-down, is Fibonacci 8-Days.

Last time there was a wide outside-down (March 8th), the next day was narrow range, volume decreasing,

This time, we have narrow range, volume increasing.

The Higher Probability

Taking it all into account, the higher probability is for continued downside. It’s a probability, not a guarantee.

If we get upside at the next session, then it’s time to stand aside, re-sharpen the pencil and start looking for another reversal potential (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.

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