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 gap-lower open Monday, January 27th, was only retraced by a Fibonacci 23.6%, the next day before continuing lower.
If that percentage holds, it’s a rare occurrence and represents extreme weakness (not advice, not a recommendation).
The chart for NVDA, shows we’ve had the largest down-thrust energy in history (NVDA began trading 1/22/99).
Now, it’s hanging below resistance (blue line).
Nvidia NVDA, Daily
Last Friday closed lower; after-hours, lower, still.
Strategy, Tactics, Focus
As the ‘About‘ section says, techniques on this site are laid out by three masters and coached, mentored, by one of, if not the best in the industry (the late David Weis).
With that said, everyone has their own style.
Currently short the sector via SOXS, as SOXS-25-04 (not advice, not a recommendation).
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.
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
DeepSeek AI App Demonstrates Pro-CCP Bias, Influence, link here.
The list is seemingly endless. Time for everybody to pile-on to the new narrative.
However, it does beg the question, Isn’t ‘The Thing‘ somewhere on I-10, in Arizona? 🙂
Getting back to reality, chief cook and bottle washer Nvidia, we’re going to adjust the trendline (just a bit) from yesterday’s update.
Nvidia NVDA, Daily
The objective is, maintain short, monitor the trend for potential break (and exit), wherever and whenever that may be (not advice, not a recommendation).
It’s important to note, yesterday’s action was Spring-to-Up-Thrust; penetration of the prior day’s low and high.
Then, The Fed
Also note, we have the Fed coming up with more shenanigans in about two hours (as of 12:03 p.m., EST).
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.
Now that one pillar of the A.I. mania has vaporized, ‘what’s next?’
To begin the search, let’s start with this headline from yesterday:
“No One Was Buying”: An Ominous Post-Mortem Of What Happened Today From Goldman’s Trading Desk, link here.
That may tell us all we need to know.
But of course, it can’t be that simple. We have to make it complicated with ‘experts’ piling on, pontificating about ‘earnings growth’, ‘multiples’ and the like.
However, did any of that play into identifying the SOXX reversal, almost to the day?
Short answer is, no.
So, why would it be a factor in determining the most likely (next) outcome?
With that, let’s take a look at the chart.
Nvidia NVDA, Daily
It’s an aggressive viewpoint; that is, NVDA’s not going to fill the gap and is in the midst of a sustained down-move (not advice, not a recommendation).
If the A.I. bubble, potentially the largest bubble since the South Sea, imploded yesterday, the chart seems like a reasonable viewpoint (definitely not advice, not a recommendation).
Loeb & Focus
Few people talk about Gerald M. Loeb, late Vice Chairman for E.F. Hutton
He’s the one that said to ‘focus’ one’s efforts on the few and rare, real opportunities.
With that said, NVDA and the SOXX are moving now, while other market appears stagnant.
Therefore, the focus is on this sector (not advice, not a recommendation).
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.
On the daily bar-chart (not shown), we have a massive gap-lower open.
Will that gap be filled or is this a real breakaway and the start of a long-sustained bubble deflating decline?
That of course, is unknown.
What is known and presented on this site, Wyckoff analysis, with its century old technique, spotted the potential for reversal well ahead of the actual fact (not advice, not a recommendation).
Final Note
As the sidebar shows, since the beginning of this year, there have been several attempts to position short in the SOXX via leveraged inverse fund SOXS.
Trades SOXS-25-01 (not discussed), and SOXS-25-02, were first, then closed, with trade SOXS-25-03, opened last Friday (not advice, not a recommendation).
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.
Hyperinflationary melt-up? A massive crash? Trump-bump to new era of prosperity?
From a strategic standpoint, taking the pulse of analysis presented in the mainstream, on YouTube, et al., it’s a mass of confusion and differing opinions.
When all else fails, when in doubt, just spit out the ‘inflation’ rout. 🙂
A Different Approach
This site’s focused on truth and truth, attracts few followers.
One of those truths is Nvidia’s latest earnings release.
That release may have indicated, the A.I. bubble, the bubble of all bubbles, has popped (not advice, not a recommendation).
With that, let’s take a look at the sector and see what it’s telling us.
Semiconductors SOXX, Weekly
This prior update said we’re waiting for the break.
Well, we got it and now, an apparent test at the Fibonacci 23.6%, retrace from the October 15th, highs.
We’ll know soon enough, if the above work and the prior updates have identified the A.I. bubble top correctly.
Using the price action model of bubbles past, a trend break under the above conditions may signal an imminent, sustained, decline not advice, not a recommendation).
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.
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.
Before we start, it’s important to note as far as the mainstream’s concerned, all is well, Nvidia continues to ‘dominate’, link here.
In that link, there’s no serious discussion on what price action is actually doing.
For that, we have this update. 🙂
Since the last post on the SOXX, it has broken the trendline to the downside.
If we model this bubble against bubbles past, specifically the 2000s internet bubble, then the SOXX has started its long, potentially sustained, decline (not advice, not a recommendation).
Of course, anything can happen; Nvidia has yet to report earnings (scheduled for after-the-bell, today).
Semiconductors SOXX, Daily
The blue arrows are breakaway gaps, indicating bearish conditions (not advice, not a recommendation).
As of this post (12:10 p.m., EST), the SOXX is attempting to ‘spring’ upward off the penetration of the new daily lows.
This is normal market behavior; it’s what happens after the close that will potentially be most important.
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.
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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