Category Archives: NVDA

The Fed’s Next Move … Rates Up

February 19, 2024 By in Bonds, Federal Reserve, Interest Rates, NVDA, TLT, Uneducated Economist, ZeroHedge

What A Surprise!

The Fed’s next move may be to raise rates, not lower them.

For those following this site, there’s no surprise. Over a year ago, we had this:

“Like ‘bread and circuses’, the ‘pivot’ discussion is a distraction … “

Incorporating the potential of rates higher into one’s analysis, ‘internalizing’ it as Uneducated Economist says, positions one completely out of the herd, able to view events objectively.

All of which brings us to the bond market, specifically long bonds TLT.

Long Bonds ETF, TLT Daily Close

Updates from this site are noted.

Until price action shows otherwise, rates are likely to head higher, not lower (bond prices down).

Therefore, using that strategic premise, the upside breakout (above resistance) in bonds had a higher probability of downside reversal than upside continuation.

No. 1 : The Usual Suspects

In the update with the above name, link here, scroll down to bullet item No. 10 for analysis.

The potential for a false breakout was correctly identified,

No. 2: Bond Reversal ? … Ruh, Roh

First, there’s potential, then, the actual.

The next update, link here, presented among other things, the odd occurrence of both bond and overall markets moving down simultaneously.

The inference being, the 40-year bond bull market is over and higher rates are more likely (not advice, not a recommendation).

Then, The Fed and Nvidia

The next few days may be quite interesting.

Nvidia (NVDA) earnings are due after hours on Wednesday and the Fed minutes are scheduled for release earlier (2:00 p.m., EST) the same day.

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

D.R. Horton ‘Rolls Over’

February 17, 2024 By in DHI, GDX, GDXJ, GLD, Gold & Silver, Gold Miners, Interest Rates, NVDA, QQQ, Real Estate, SLV, SOXX, SPY, TLT, ZeroHedge

When Real Estate Goes …

It’s been said, ‘when real estate goes, everything goes’.

Like a slow-motion train wreck, since late January, this site’s been watching the (potential) topping activity of D.R. Horton, DHI.

Now, DHI is reversing; coincident with the housing starts collapse, link here.

D.R. Horton, DHI Weekly Close

We’re right at the top of the ‘terminating wedge’.

Downside penetration and test will provide confirmation of the reversal (not advice, not a recommendation).

The major market indices appear to be topping out as well.

The SOXX, may have reversed. Trading was ‘outside-down’ during yesterday’s session.

The SPY, and QQQ, also posted outside-down.

The potential Nvidia, NVDA reversal (link here) shows that so far, that high has not been exceeded.

Rates Up, Not Down

Adding gasoline to the fire, part of this site’s strategy is rates are going higher, not lower (not advice, not a recommendation).

So far, we see that’s true with long bonds (TLT) reversing to the downside, yet again.

And Then … Gold

Let’s not leave out the latest bullish report on gold (and silver), link here.

Notice the bias … that silver’s cheap relative to gold.

How about the massive, multi-year, ‘non-confirmation‘ between gold and the other monetary metals.

If it was real 1980s style inflation, everything would be moving up in tandem … which it is not; something else is going on.

Is the mining sector, GDX, GDXJ, anticipating a price decline in gold?

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

‘Parabolic’ … Is Now, ‘Reversal’

February 13, 2024 By in NVDA, Semiconductors, SOXS, SOXX 1 Comment

The Top For NVDA?

If yesterday’s NVDA action was the top, we won’t know for sure until a new daily low is posted.

Even then, a new daily low could just be ‘a top’ and not ‘the top’.

Pre-market trading in both NVDA and the SOXX index (ETF) is currently pointing to a lower open; evidence for reversal is building (not advice, not a recommendation).

Nvidia NVDA, Daily

Yesterday’s trading covered a wide “33.6” points; there’s that ’33’ again. 

How many times have we seen that in the markets?

As of this update (8:17 a.m., EST) the CPI reports have yet to be released.

Let’s see if that has an effect on the potential NVDA 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

Nvidia Goes Parabolic

February 7, 2024 By in NVDA, Semiconductors, SOXS, SOXX

Latest Trendline @ 86,000%, Annualized

Any day now, the bubble pops (not advice, not a recommendation).

NVDA, may have even topped-out today (or possibly will at the open tomorrow)

We had at least two recent, ‘mee-too’ recommendations (providing contrarian signals) for the high flyer; links here and here.

As we’ll see in the chart below, NVDA appears to be in a blow-off top with ever-increasing rates of ascent.

Nvidia, NVDA, Daily Close

This is what tends to happen during a mania top.

Obviously, the latest trendline, rising at +86,000% on an annualized basis, is not sustainable for the long term.

At this juncture, anything can happen. 

NVDA, already had a tremendous bull move from the recent lows of October 14th last year (posted low of, 108.13); realistically, how much upside is left?

Depending on tomorrow’s action, we’ll discuss a potential (short-sale) set-up in the SOXX.

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.

There’s a ‘Hole’ in The SOXX

December 2, 2023 By in NVDA, Positions, Semiconductors, SOXS, SOXS-23-10, SOXX, Wyckoff 1 Comment

Two-Weeks of Churn

The SOXX, has been churning at 510- 525, for over two weeks with no net progress.

What happens if it can’t go materially higher?

It’s reasonable to think, good news is already out; evidenced by Nvidia’s price action.

If we look at NVDA, using it as the proxy, it has reversed off all-time highs, slipped below support and on Friday, came back to test; a weak one at that (so far).

SOXX Highs, Long Ago

The SOXX posted its all-time-highs nearly two years ago with the most recent rebound in August, this year.

Now, after a subsequent move lower, price action has come back up to test, forming an apparent hole.

Semiconductor SOXX, Daily

The chart says it all; We’re at The Danger Point®

Price action appears to be struggling at this level.

If it can’t break higher and/or, posts a new daily low, it may be confirming a false breakout (Wyckoff, ‘Up-Thrust’).

That would open up possible testing of gaps (lower), potentially the Trading Range lows, as well (not advice, not a recommendation).

Positioning

As one would surmise, a short position was opened on Friday via Leveraged Inverse Fund SOXS.

Entry @ SOXS 8.59, Hard Stop @ 8.22, Soft Stop (discretionary) @ 8.30 (not advice, not a recommendation).

Trade is labeled: SOXS-23-10

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

SOXX … Setting-Up for Tomorrow

August 22, 2023 By in NVDA, Positions, Semiconductors, SOXS, SOXX, Wyckoff 1 Comment

Anything Can Happen

Yes … anything can happen but what’s the most likely thing?

At this juncture, based on price action so far (as of 11:38 a.m., EST), the SOXX looks like it will penetrate the blue line resistance tomorrow or the day after (not advice, not a recommendation).

That penetration should it happen, will set-up a potential reversal (Wyckoff up-thrust) condition.

Exactly how that action will take place is unknown. Nvidia (NVDA) is scheduled to release earnings tomorrow after the close.

Semiconductor SOXX, Daily

The chart shows a potential target area.

The target is right in the vicinity of a 50%, retrace from the reversal high (7/31/23), to the low, set last Friday the 18th.

Positioning

Based on the behavior of price action during the last session, it was clear for the short term, higher action in SOXX and lower action in SOXS was probable

With that, even though the stop of SOXS 9.93 was not hit (as it was today), a discretionary exit was made at SOXS 10.51, which yielded about +8.4% on the trade.

Next Steps

On the sidelines for now (not advice, not a recommendation) and watching closely.

It seems the mania has increased all the more even though we’re past the top on the SOXX.

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

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

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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

AI Fails To ‘Follow-Through’

August 15, 2023 By in NVDA, Positions, Semiconductors, SOXS, SOXX 2 Comments

Where’s The Continued Upside?

If it’s a screaming bull market and not a potential reversal, after yesterday’s SOXX launch, you’d expect more upside.

After all, we’ve brought out the big guns for added ‘credibility’:

Dan Loeb, David Tepper, and Paul Tudor Jones piled into Nvidia stock last quarter – and other elite investors joined them

Throw on top, the promise of massive IT budgets:

AI set to unleash an unprecedented wave of spending.

Well, with all of that, we must hike our price target:

NVDA Stock Alert

The hysteria increases ever more when we read, NVDA could move the entire market … just days from now.

That part may actually be true but not the way anybody thinks. 🙂

So, let’s move past the mee-too-ism and focus on what the price action’s actually doing.

You know, like looking at reality.

Semiconductor Leveraged Inverse SOXS, Daily

The short position via SOXS remains intact so the focus is on the SOXS daily time frame (not advice, not a recommendation).

As is typical with the markets, it can be read both ways.

Today’s action was higher (lower for SOXX) but there was no new SOXS daily high.

At the same time, it looks like a trend is being confirmed.

Positioning

Taking the recent analysis all-together, links here, here, here, here, especially here, I’m going with the SOXS trend confirmation.

That is, Inverse Fund SOXS to move higher with Sector Fund SOXX lower (not advice, not a recommendation).

Hard Stop remains at SOXS 9.42.

However, we now have a Soft Stop (trader discretion) @ SOXS 9.93 (yesterday’s low).

Tomorrow’s session has the Fed meeting minutes released at 2:00 p.m., EST.

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

NVDA … Testing The Reversal

August 14, 2023 By in GLD, Gold & Silver, NVDA, Positions, Prechter, South Sea Bubble, SOXS, SOXX 1 Comment

The ‘Downside’ Reversal

The AI, mania’s looking a lot like the hysterical gold bugs from years ago.

Just to remind everyone what it was like.

Gold links below are nearly two years old and $3,000/oz. gold is nowhere in sight:

Von Greyerz: Gold-O-Mania Is Coming!

Gold Breakout Imminent!

Gold shhh…

Gold Probes Multi-Month Highs

“$3000 In Months, Not Years”

Gold & The Dollar Soar

Gold & Crypto Surge

The AI Bubble … Past The Top?

Moving on, this post said as we reverse and head lower, expect the hysteria to increase.

You’ll have to be the judge on whether or not the hype has moved to the next level:

Jim Cramer Thinks

‘Pullback Will Be Short-Lived’

Nvidia jumps 6%

Chipmakers Rally

Tepper’s Appaloosa places big bets

UAE said to buy ‘thousands‘ of Nvidia GPUs

NVDA, Historical Chart

The weekly chart of NVDA from 1/15/99, to present, puts the situation into perspective.

Recall, from a previous post, Prechter indicates, we haven’t been at these extremes in over 300-years.

Positioning

It was a rough day to be short the Semiconductor sector via inverse fund SOXS (not advice, not a recommendation).

However, the position remains intact with Hard Stop unchanged @ 9.42.

In the after-hours (as of 7:03 p.m., EST), inverse fund SOXS continues to edge lower; currently trading @ SOXS 9.78.

The NVDA earnings report is moving ever closer.

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

‘It’s Just a Flesh Wound’

August 11, 2023 By in NVDA, Positions, Semiconductors, SOXS, SOXX, Van Tharp, Wyckoff 2 Comments

So, Now It Starts

It’s like the knight in Monty Python.

We have the usual suspects being rolled out to let us know, there’s nothing to worry about.

Links here, here and here.

This one, is especially ripe.

Watch until the end (if you can stomach it) where the host asks in exasperation, after a 200% gain in NVDA, ‘is there really more upside?’

At this point (as of 11:05 a.m., EST), the answer is no.

Forces Of Thier Own

All the way back in 1902, Wyckoff discovered after studying the tape (the Ticker):

‘Forces were at work, moving prices, that had no connection to real values.’

That, ladies and gentlemen, is all you need to know.

Fundamentals are just a well-orchestrated ruse to keep the public thinking, if their pencil’s sharper than the next guy’s (think FactSet), they’ll have the market figured out.

Wyckoff ‘Nails It’

So, he we are.

Using Wyckoff analysis (reading the tape) the probability for the current reversal, was identified within a day.

The subsequent short position (via SOXS) was stopped out yesterday, almost lost completely, but for the re-entry @ SOXS 9.70 (not advice, not a recommendation).

As of this post, we’re a full point higher at 10.70, an 11%, gain in just hours … not bad.

With that said, we’ll shift gears a bit and go straight to the leveraged inverse fund SOXS, but use a 3-Day chart.

Semiconductors Leveraged Inverse SOXS, 3-Day

The 3-Day, is being used as the market itself has defined (for now) it shows price action characteristics more clearly.

Distance between the entry and the stop is 0.28-pts.

As a position size example:

Risking $1,000 on the trade would result in a size of 3,571-shares of SOXS (not advice, not a recommendation).

For more information on sizing, see Van Tharp, link here.

Note: There’s a big price difference (over 450%) between the Wycoff text and the Van Tharp text … just sayin’.

Next Steps

At this point, there’s not much to do on this trade (not advice, not a recommendation).

Keep in mind we’re at an historic bubble extreme, the likes of which has not been seen since Sir Issac Newton lost his fortune over 300 years ago.

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