Category Archives: 1987

Will The SOXX, Unravel?

August 22, 2025 By in $SPSIBI, 1987, Artificial Intelligence, Biotech, Positions, Richie Naso, Semiconductors, SOXX, SOXX-25-12, SPBIO, XBI, XBI-25-02 3 Comments

Right Out of Naso’s Playbook

‘Think like a criminal’, is one piece of advice from trading legend Richie Naso.

He also describes the algorithms as not caring about profit or loss, but ‘liquidity’ and ‘volatility’.

This morning’s session had plenty of both.

Looking at SOXX price action, launching higher on the Fed speech, it’s clear what the algorithms were attempting.

That is, hit the stops hiding at ‘technical areas’, as Naso calls them.

Semiconductors SOXX, Hourly

Price action went to where stops were hiding or where the inexperienced traders panicked.

Under such conditions, what’s the appropriate action?

Sell, or sell short (not advice, not a recommendation).

From this site’s perspective that’s exactly what happened.

Currently short the SOXX, as trade SOXX-25-12, with the stop at (or to be) the session high.

Which One to Pick?

As the last update said, the stop on biotech XBI-25-02, was at the August 18th high. Obviously that position was stopped out.

The question is, why not re-enter again short?

The answer: XBI made new daily highs where the SOXX did not. SOXX did not print above its high set on August 14th.

Therefore, at this juncture, SOXX is posting more relative weakness than XBI.

The market itself directs the trading action.

Revisiting August 1987

One last thought: August 25th, 1987, was the date of the all-time highs back then. 🙂

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

Bear Market = Wealth Transfer

April 14, 2025 By in 1987, GDX, GDXJ, GLD, Gold & Silver, Gold Miners, JDST, JDST-25-09, LABD, LABD-25-06, Positions, SILJ, SLV, Spring-to-Up-Thrust, Uneducated Economist Tags: , , , 1 Comment

The ‘Extraction’ Process

Bear markets are not (always) prices going straight down, a la 1987.

Bear markets are ‘price destruction’; a series of ups and downs that effectively drain (whipsaw) the typical market account.

The last two weeks have seen record breaking extremes; the latest being this update, indicating the market posted the largest volume ever recorded.

Dodging Bullets

A case in point, this site’s narrow miss on having a huge gain (LABD-25-06, short biotech) being completely obliterated in last week’s largest short squeeze, ever.

It’s (almost) a ‘no-brainer’, this type of market behavior is not bullish (not advice, not a recommendation).

Then, The Propaganda

If it’s not dodging bullets, it’s sifting through the propaganda, half-truths, and outright lies.

The latest of these, (could be) ‘China dumping dollars’ and other ‘collapse’ narratives.

There’s volatility for sure. That’s what bear markets are about. However, this link might help mitigate the hysteria around the ‘It’s all blowing up’ narrative (not advice, not a recommendation).

In the above link, how it really works, time stamp: 17:58

So, here we are. What’s next?

Gold & Silver, Update

Even though both gold (GLD), and silver (SLV), are trading lower as of this post (12:52 p.m., EST), the Junior Miners GDXJ, posted a new daily high, thus, short JDST-25-09, was exited (not advice, not a recommendation).

Today’s activity does point to a new potential (developing) set-up, this time, silver miners SILJ.

Silver Miners SILJ, Daily

The set-up (spring-to-up-thrust) may develop from here, or it could diffuse into chaos.

It remains a possibility, until price action itself says, ‘no’.

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.

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

Will It Bounce?

April 6, 2025 By in 1987, CVNA, KMX, Martin Zweig, ZeroHedge

Carvana, In Position

Yesterday, it was CarMax.

Today, it’s Carvana.

Before we get to Carvana, yesterday’s update also said, we’d have no shortage of ‘post-mortems’.

Well, here they are:

“Mr. Market Will Keep Searching (Lower) For A Put Strike” – Goldman Hedge Fund Honcho Warns ‘Trading Environment Remains Exceedingly Fluid’

Why It Should Not Bounce Here Yet

Why It Should Bounce

You can’t make this up. Those two headlines (above) were one after another on ZeroHedge.

That’s probably enough. You get the idea. 🙂

In the case of Carvana, let’s look at what the price action is telling us is the most likely event.

Carvana, CVNA, Daily

After-Hours on April 2nd, trading posted briefly at 243.6, within the purple oval, creating an ‘Up-Thrust’.

Last Friday’s action penetrated support and is holding.

Note the price range of that day’s bar is less than Thursday’s, with volume slightly larger.

For now, CVNA, has stopped dead at support.

There may be follow-through on Monday, but with the (YouTube) crowd and others expecting a ‘crash’, that makes is less likely (not advice, not a recommendation).

When a real expert warns of a crash, it may look something like this (time stamp 6:42).

Note the condescension from the other panel member.

Then came Monday, October 19th, 1987.

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.

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

Trump’s ‘Not Looking’

March 7, 2025 By in $SPSIBI, 1987, 2007 - 2008, Biotech, GDXJ, Gold & Silver, Gold Miners, JDST, JDST-25-04, LABD, LABD-25-02, Positions, SPBIO 3 Comments

Not Political … Just Fact

The last time we had a sustained multi-year meltdown (’07 – ’08), there was a ‘ban’ on short selling.

Since Trump is ‘strictly business’, will he try (or instruct the SEC) to save the market?

Based on this link, maybe not (not advice, not a recommendation).

If that’s true and there are no ‘saves’ this time around, then we’re in uncharted territory; at least since the ’87 crash.

Gold Miners ‘Bid’?

The rest of the market’s breaking down, but the miners are holding steady (sort-of). They look like there’re headed for at least one more push higher.

Junior Miners GDXJ, Daily

We’re including the MACD, to show if there’s a new high above the 53.00 – level, it sets-up a (potential) bearish MACD divergence.

This coming Tuesday, is Fibonacci Day 8, from the February 28th lows.

Positioning

The short trade JDST-25-04, was stopped out early in the session. No other shorts are planned for this sector … yet (not advice, not a recommendation).

Short trade in biotech XBI, remains active as LABD-25-02, with stop at LABD 7.44 (not advice, not a recommendation).

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.

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

August 25th, 1987

August 26, 2024 By in 1987, 2007 - 2008, Artificial Intelligence, Bonds, Dow 30, NVDA, SOXS, SOXS-24-13, SOXX, Uneducated Economist

All Time High (and reversal) For DJIA

Everybody seems to talk about the crash of ’87, as if it suddenly appeared out of nowhere, October 19, 1987.

Digging deeper, the crash started months earlier, at the market peak on August 25th.

One may consider today, Monday, August 26th, the 37th anniversary of that top; when by chance, we’re at another all-time high.

By now, most of us are tired of The Gong Show style prognostications:

‘Crash this’ and ‘crash that’, ‘the dollar’s going to collapse’ and there’s that! 🙂

At this point, none of those things have happened … yet.

In fact, the ‘collapse’ may actually be of a different sort this time around; posed by Uneducated Economist, link here (time stamp: 2:04).

Real & Separated

We may indeed get an ’87 or ’07, type of collapse, eventually.

Or, it may be that sectors wipe-out individually.

However, as UE points out (above, link), the ‘crash’ this time is hidden. It’s the separation of wealth from the ever more have-nots, to the haves, and have-more.

The (Biggest) Bubble

As the Dow Jones is making an historic high, possibly the biggest bubble of all time, the A.I. bubble, led by NVDA, and the SOX Index (SOXX, tracking ETF), peaked out on July 11th (not advice, not a recommendation)

When we last left the SOXX, with this update, link here, it had this to say (emphasis added):

“If we just saw a test of resistance (solid black line), then there’s only one (or a variation of one) right answer at the next session.”

“That is, SOXX, price action (by the close) to be either net sideways or down (not advice, not a recommendation).”

Well, ladies and gentlemen, that’s exactly what happened.

The SOXX, posted a new daily low, closing down -5.86-pts., or -2.51%.

Nvidia is scheduled to release earnings this Wednesday.

Let’s see what happens next.

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.

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

Correction … or … Crash?

August 2, 2024 By in 1987, Artificial Intelligence, Biotech, Bonds, Corn, Federal Reserve, Gold & Silver, Natural Gas, TLT 1 Comment

1987, Deja Vu

Insane, delusional valuations, high interest rates, no rate cut.

What could go wrong?

Visitors to this site already knew that ‘something’s up’.

Fully documented well in advance of today, was the A.I. bubble reversal, silver reversal, biotech reversal, and commodities like corn and Nat-Gas continuing their sustained decline.

Now the market hysteria is resulting in the typical knee-jerk, ‘flight to safety’ to the bond market (not advice, not a recommendation).

Surely, with all of that, the Fed will cut rates, right?

For the (potential) answer to that question, let’s look at the bond market.

Long Bonds, TLT, Weekly

Already proposed on this site, the Fed does not lead the bond market and interest rates, it follows it (not advice, not a recommendation).

So, what’s this chart telling us?

If the market continues its decline in the coming weeks, TLT price action itself shows a potential for higher bond prices (lower yields).

We’re just over six-weeks away from the next Fed meeting.

Fed Follower?

If the Fed is still a follower, not a leader and if bond (TLT) prices reach the target just as the September meeting is held, then, one would expect a rate cut (not advice, not a recommendation).

Important to note, if TLT gets to the target area, it’s in Wyckoff Up-Thrust (potential reversal) position.

Economic Air-Pocket

If there is a rate cut as a result of the leading action of the bond market and then it reverses to the downside (rates higher), that’s when it would get real interesting.

Correction or crash; we may have to wait until September to find out (not advice, not a recommendation).

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.

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

The Nvidia (Split) Top

June 8, 2024 By in 1987, 1998, 2000 - 2001, 2007 - 2008, Artificial Intelligence, Federal Reserve, NVDA, SOXX 3 Comments

Top of The Tops?

Here … ‘Hold this bag’.

Having been through the crash of ’87, ’98, ’01, ’08, and now, the feeling is similar.

Each time the vehicle (stock) is different but also the same, at the same time.

In case anyone wants to review, here’s the definition of ‘bag holder‘.

Is Now, The Time?

Previous analysis and potential top identification for NVDA, has been premature.

With that in mind, presented below are two charts.

One has the Fibonacci count from the October ’22 lows; the other, shows a trading channel overlay.

The inference is, we’re close to some kind of ‘event’ whether it be sideways congestion or reversal (not advice, not a recommendation).

Nvidia NVDA, Weekly

It appears, since the October ’22 lows, NVDA is being influenced by a Fibonacci sequence.

The ”close’ chart has the same Fibonacci count as well as the current trading channel.

Next week is ‘Week 88’, stock-split (10 to 1), as well as the Fed meeting.

Week 88, is within the margin of error for a precise Fibonacci count, Week 89.

With NVDA, at the top of its trading range, one needs to be on the lookout for some type of Fed/Stock-Split ‘overshoot’ or other indicator of potential upside limit (not advice, not a recommendation).

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.

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

The SOXX, Looking Both Ways

June 3, 2024 By in 1987, Semiconductors, SOXS, SOXS-24-07, SOXX

Narrowing Risk or Preparing For Higher?

In the pre-market, the SOXX is up about +1.29%, trading at 236.90.

As discussed in the ‘comment’ section of the prior update, if last Friday was short covering, the expectation was for a lower open.

So, far it’s not there, or there’s more ‘covering’ to go.

From a Fibonacci standpoint (shown below), pre-market action is near the 61.8% retrace.

Semiconductor SOXX, 15-minute

As of this post (8:15 a.m., EST) SOXX is trading at the Fibonacci level (small black ‘brackets’ on the chart).

We can see that area is also resistance.

In-n-Out

This is what working at ‘the edge of the lake’ is all about.

Price action has not shown decisively whether it will continue higher or if we’re in a reversal.

A decisive push past Friday’s SOXX high, 237.35, likely means it’s going to attempt to close the gap left from the May 29th open (not advice, not a recommendation).

Looking at it both ways, the risk on a short position is being lowered further, or we’re on to new summertime highs (like August 1987) before potential reversal.

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.

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

Positioned At The Extremes

September 2, 2023 By in 1929, 1987, Artificial Intelligence, Mass Psychosis, Natural Gas, Positions, Semiconductors, SOXS, SOXX, UNG

‘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

Tales of The SOXX Top

August 2, 2023 By in 1987, Bonds, GDXJ, Gold & Silver, Gold Miners, JDST, Prechter, SOXS, SOXX, TLT, Wyckoff 4 Comments

Was It August 1st?

Was yesterday, the day?

The day the SOXX, closed higher but failed to print a new high.

It’s now early in the session (9:55 a.m., EST) and we have a new daily low.

There have been sell signals before but this one has a different ‘feel’ (not advice, not a recommendation).

Yesterday, bonds (TLT) gapped open lower and broke below support; rates are rising … again.

The 1987 Set-Up

Those old enough, remember the set-up. Rates up (bonds down) and market rising to all-time highs at the same time.

A chart of the ’87 crash is here. Note, the high was in August, that year.

Now, a video from Robert Prechter, about the current historic extremes.

‘Not since the South Sea Bubble of the 1700s’

Couple all of that with bonds (TLT) breaking down and we could have that ‘inflection point’, saying we’ve reached the top (not advice, not a recommendation).

The Mania Goes ‘Manic’

Going back to this post, it said to expect the AI proaganda to increase as we reach the top and reverse down.

If yesterday was that day, then we’ve got more articles coming about the downside being a ‘buying opportunity’.

It’s been the same throughout history

From a positioning standpoint and Wyckoff analysis perspective, under such conditions, one is to pick the weakest market to short and not the strongest (not advice, not a recommendation).

Junior Gold Miners, GDXJ, Bear Market

The last update showed how positions can be de-risked.

There’s always uncertainty but working long enough in the markets and eventually an understanding is formed on how the game is played.

Fake, fabricated or ‘serendipitous’ news articles getting the public on the wrong side, are just part of the game.

In the early session, the GDXJ, is continuing its move lower.

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