‘The Big Money’s in, The Big Move’ … Dr. Elder

The whole quote from Elder (paraphrasing):

‘The big money is in the big move but only the top-tier trader or speculator has the ability and skill to trade it…’

This ‘big money’ idea is exactly what Jesse Livermore figured out as part of his plan after years of making ‘piking bets’ on minor price fluctuations.

Ultimately, his method was to anticipate events about to happen in a ‘big way’.

He netted over $1 million, during the Panic of 1907, probably his best example of trading the big move.

Note: $1-mil, in 1907, is about $32-mil, today.

Here’s a chart of the ‘Panic‘.

Look how similar it is, to the chart of the QQQ bubble and the current position of the SOXX; except the (potential) wipe-out, of course. 🙂

Back at the 2000, bubble top in the Qs, we have the following.

Nasdaq QQQ, Weekly

Several trading channels can be identified; the most aggressive, is the one shown.

The channel above, lasted nearly three-months, from week-ending 1/26/01, to week-ending 4/6/01.

Note that price action rose for about three weeks in a ‘January Effect’ at the beginning of ’01, before rolling over in a big way.

There’s a lot going on in this chart. For example, the January effect rise took the Qs back to a Fibonacci 23.6%, retrace of the entire down move.

Strategy

The coming days and weeks are going to let us know if the SOXX, is modeling the mania bubbles of the past (not advice, not a recommendation).

A possible important distinction: In the prior update, the SOXX, had two massive down-thrusts, not just one.

One could even argue there were three (week ending 7/19/24).

Does that mean we’re at an order of magnitude larger on what comes next?

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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