Category Archives: Semiconductors

The SOXX, Has Spoken

November 11, 2024 By in Artificial Intelligence, Great Depression 2.0, Livermore, Prechter, Semiconductors, South Sea Bubble, SOXS, SOXS-24-20, SOXX

Anyone Listening?

For the vast majority, the answer is, ‘probably not’.

For the tiny fraction monitoring these updates, we should be getting the uneasy feeling, the (major) pivot downward in the SOXX, may have just started (not advice, not a recommendation).

Painstaking Detail

Over the past several months, presented on this site, the assessment that A.I., ‘artificial intelligence’, is just another mania in a long line of manias, going way back to the South Sea Bubble of the 1700s; reference posts or links here, here, and here.

The trick is, and has been, what to do?

One Man’s Approach

If I had to summarize my approach to the current situation, it would be to model Mr. Partridge (a.k.a. ‘Turkey’) from the book, Reminiscences of a Stock Operator.

That is, get into position, minimize transactions, stay there until the market says otherwise (not advice, not a recommendation).

That’s what’s being done; trade labeled: SOXS-24-20.

For additional reference, click on that number in the sidebar to see all related posts.

Election Reaction Complete

Based on SOXX, price action itself, it’s possible the upward blip from last Tuesday’s events has run its course.

If that’s true, we can get back to the (potential) implosion of the sector (not advice, not a recommendation).

As of this post (11:41 a.m., EST) the SOXX, has retraced nearly every bit of last week’s up-move.

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

Trading The ‘Crash Channel’

November 9, 2024 By in 1907, 2000 - 2001, Artificial Intelligence, Dr. Elder, Elliott Wave, Great Depression 2.0, Livermore, QQQ, Semiconductors, SOXS, SOXS-24-20, SOXX Tags: , , , ,

‘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.

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

Nasdaq & A.I. Bubbles, Compared

November 8, 2024 By in 2000 - 2001, Artificial Intelligence, Nasdaq, QQQ, Semiconductors, SOXS, SOXS-24-20, SOXX 15 Comments

Similar Pattern … So Far

Two charts are presented below.

First, the Nasdaq bubble of the 2000s.

Then, the A.I. bubble in semiconductors, the SOXX.

Nasdaq QQQ, Weekly

Massive downward thrust indicated the mania was over.

The bubble in the SOXX, compared to the Qs, looks eerily similar except the trend break is missing (so far).

Semiconductors SOXX, Weekly

Note, in the case of the SOXX, there were two massive down-thrusts.

The second (not highlighted) was Fibonacci 5-Weeks later.

Of course, nothing is known for sure until it’s all over.

However, the charts are similar.

There’s been a lot happening over the past few days.

Those events may have had all the effect they’re going to from an upside perspective (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

Technical Observations

November 6, 2024 By in Artificial Intelligence, Semiconductors, SOXS, SOXS-24-20, SOXX

Orderly Descent (so far)

At this point, to be short this market is a judgement call (not advice, not a recommendation).

If there’s no appreciable upward action from this point, the SOXX is in an orderly decline.

Net distance traveled between the magenta lines and blue lines are approximately equal.

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 (short) Update

November 5, 2024 By in Artificial Intelligence, David Weis, Semiconductors, SOXS, SOXS-24-20, SOXX

Waiting For The (next) Break

It can be nerve-wracking, waiting out the market to see what happens next.

As my mentor (David Weis) used to say, if you’re in a position “The mind remains active”, as the trade progresses, or fails.

Whatever your weaknesses are, the market will exploit them.

For now, we’re going to show just a segment of the SOXX, daily chart (as of 11:16 a.m., EST).

Semiconductors SOXX, Daily (segment).

The important part here, is the attempt of the SOXX, to rally.

Each attempt posting a (daily) high just slightly less than the high before.

On can infer from the chart, if a new daily high is posted (above yesterday’s 222.46), then the trade is probably failing, time to exit (not advice, not a recommendation).

Until then, we light up as many cigarettes as possible, attempting to stay calm. 🙂

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, Between A Rock …

November 1, 2024 By in Artificial Intelligence, Semiconductors, SOXS, SOXS-24-20, SOXX

… And, The Hard Place

At the support line, it’s a battle between bulls and bears.

That struggle goes on constantly but there are times when the outcome’s especially important … like now.

The daily chart shows the events of the past few days

The up-thrust (reversal), the penetration of support and now, the attempt to ‘spring’.

Semiconductors SOXX, Daily

If there’s a ‘fundamental’ to keep in mind; we’re potentially in the biggest bubble (the A.I. mania) in world history (not advice, not a recommendation).

Even so, the price action is ‘truth’.

Will the ‘spring’ set-up pass or fail?

If the SOXX, gets itself ‘back into the range’, above the green line, it begins to weight probability for more upside.

If it can’t hang on at current levels, posts a new daily low, downside is more likely (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

Carvana’s (final) Squeeze

October 31, 2024 By in Artificial Intelligence, CVNA, Semiconductors, SOXS, SOXS-24-20, SOXX, TSM Tags: , , ,

Who’s Left, To Cover?

Short interest on Carvana, has been holding at a stubborn 12% – 13%, for what seems like months.

As of this post, BigCharts reports current short-interest at 11.67%.

Maybe that’s about to change with today’s gap-higher action (not advice, not a recommendation).

Carvana just released earnings and like the analysis of Taiwan Semi (link, here), this may be the end of the squeeze (or, the beginning of the end).

Carvana CVNA, Weekly

Pre-market action’s right at the 61.8%, retrace level.

Note the magenta arrow on Force Index, middle panel.

Subsequent upward thrusts have less and less energy.

Other Markets: SOXX

We’re about twenty-minutes before the open and Semiconductors, SOXX, looks like it will confirm the downside reversal (not advice, not a recommendation).

There may also be a downtrend line in play.

More on that later.

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

Missed It By … ‘That Much’

October 30, 2024 By in Artificial Intelligence, David Weis, DRV, DRV-24-06, IYR, Real Estate, Semiconductors, SOXS, SOXS-24-20, SOXX, Wyckoff 1 Comment

Thanks Go To, Maxwell Smart

As seen in the chart below, target for the SOXX, retrace was off by just a few (trading) hours.

‘Missed it by that much‘

The attack on SOXX, resistance, near 234 – 236, held; now, there was a huge gap-lower open.

Just to restate the purpose (usefulness) of Wyckoff analysis, fundamentals had nothing to do with identifying the potential up-thrust, then reversal.

With that, let’s move on.

Semiconductors SOXX, Hourly

The markings in the prior update have been re-created; showing how close price action came to target(s) in both location and time.

Back then, was this:

Now, we have this:

For those who have the David Weis training CD, the above scenario was described by him (seventeen years ago), almost to the exact ‘T’.

Positioning

Following the guidance of the late master, a short has already been opened; SOXS-24-20 (not advice, not a recommendation).

Stats: SOXS entry @ 19.98, Stop @ 19.81 (or the session low), ‘risk’ is 0.17-pts (not advice, not a recommendation).

Other Trades

Early in the session, the short on IYR, trade DRV-24-06, was closed right at the stop; loss was 0.34-pts. (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 … Potential Set-Up

October 28, 2024 By in Artificial Intelligence, Biotech, Semiconductors, SOXS, SOXX, XBI 1 Comment

Once Again, Repeating Pattern

We’re about twenty-minutes before the open; the SOXX, looks like it will attempt to move above resistance.

If that happens, it’s one more check on the list for a (minor) set-up, a repeating pattern.

Small patterns can turn into larger ones or dissipate altogether; it’s interesting that biotech had a similar set-up this past Friday.

Semiconductor SOXX, Hourly

There are no ‘data’ releases scheduled for the day … not that it would matter.

The 800-thousand jobs revision should have told us all we need to know about ‘data’.

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

Market Directed Action

October 25, 2024 By in $SPSIBI, Artificial Intelligence, Biotech, LABD, LABD-24-20, Semiconductors, SOXS, SOXS-24-18, SOXX, SPBIO, Wyckoff, XBI

Follow The Tape

‘The “Tape” is the (market) master … and the master is a tyrant’

Wyckoff, circa 1910

With that in mind, there were some obvious changes in positioning early this session (not advice, not a recommendation).

Action(s):

Short trade in semiconductors, SOXS-24-18, was exited with about 3.1 % profit (not great, but ok).

Biotech XBI, got itself into an up-thrust (reversal) condition.

After leaving this sector alone for several weeks, we’re back in on the short side; LABD-24-20 (not advice, not a recommendation).

Charts to follow.

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