Category Archives: Artificial Intelligence

From ‘Hype’ to ‘Opportunity’

August 31, 2023 By in Artificial Intelligence, Positions, Semiconductors, SOXS, SOXX, Wyckoff 1 Comment

What A Difference A Day Makes

Update: 9:50 a.m., EST

Exited SOXS @ Stop 9.05, then re-entered after the open at 9.19.

Hard Stop @ Session Low 8.97 (not advice, not a recommendation)

SOXX, price action pushed above well-established resistance and so far, has failed to hold.

After hours has the SOXX, trading down -2.45-pts. (as of 7:30 p.m., EST) which gives us a hint there may be a new daily low at the next session.

If so, it’s a Wyckoff Up-Thrust, a reversal, with significant potential for downside.

Positioning

Already short this sector via SOXS with hard stop at the session low of SOXS 9.05 (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.

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

The ‘Bag Holders’

August 25, 2023 By in Artificial Intelligence, Natural Gas, Positions, SOXX, UNG 1 Comment

‘We Need A New Story’

The mainstream has run out of hype; at least for now.

Their AI mania narrative and price action blew up yesterday.

The probability for a blow-up was identified ahead of time, here.

Who knows how many retail investors bought in, now, left holding the bag.

The more probable (overall market) outcome at this point, is sustained, persistent, downside … possibly for years if not decades (not advice, not a recommendation).

However, not every market is going to go straight down. Some, might actually go higher.

Natural Gas & The ‘Disruption’ Trade

One of those upside probabilities highlighted in this update was Nat-Gas.

From that update we have:

“If UNG, heads lower yet again, it could be the last straw for the weak bulls, causing them to close out.”

Nine trading days later, that’s exactly what happened.

The original chart of UNG, has been updated to show subsequent price action.

Natural Gas UNG, Daily

When price action penetrated support (lower blue line), it puts UNG at The Danger Point®

This is where the risk of being wrong for a long position is least (not advice, not a recommendation).

Positioning

Taking the above into account, with downside risk potentially minimized, two entries were made during this session (currently, 1:21 p.m., EST).

One at UNG 6.64, and another larger entry at UNG 6.75.

An obvious Hard Stop is yesterday’s low of UNG 6.49, with a Soft Stop (trader discretion) at today’s low of UNG 6.63 (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.

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

SOXX, Hits Downside Target

August 19, 2023 By in Artificial Intelligence, Livermore, NVDA, Prechter, Semiconductors, South Sea Bubble, SOXS, SOXX

First of Many?

At this point, market bulls have to be just a little bit nervous.

Is the reversal from Friday, going to hold into next week or was it just a blip on the way to much lower levels?

Can a ‘Once in 300-years mania’, affect us here and now. Is that knowledge useful for day-to-day decisions?

One way to answer is to place that fact in the ‘fundamentals’ category; knowing it’s there but stay absolutely focused on the immediate truth, that is, ‘price action’.

The SOXX, So Far

We can see the SOXX reversed as identified here.

Then it continued lower, formed a trend line, shown here (using inverse SOXS).

Fast forward to now.

The weekly chart (below) shows price action contacted the first Fibonacci projection ‘exactly’ and rebounded.

That ‘rebound’ was Friday’s reversal bar.

Semiconductor SOXX, Weekly Candle

We’re at a critical juncture.

Livermore said years ago, ‘surprises tend to come in the direction of trend’.

With that, Google may have just released the first of many AI, and specifically NVDA, market surprises.

That report is the for the mainstream and even it admits, ‘There was a lot of hype’.

When hype is exposed, the market typically exacts its own form of revenge.

That revenge usually falls on the ‘little guy’ who’s left holding the bag, unable to fathom, ‘the experts’ were only in it for the money.

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