Category Archives: Semiconductors

The SOXX Drop

September 5, 2024 By in Artificial Intelligence, Prechter, Semiconductors, SOXS, SOXS-24-15, SOXX 1 Comment

Hardest Part … Waiting

Back in the day, Robert Prechter Jr., said it himself (paraphrasing):

‘You can reap a windfall, just by monitoring a trendline’

Of course, the hard part is identifying the trendline … if there even is one.

Implied with that, already being in position to take advantage of that trendline.

Building The Trade

Positioning short in the SOXX (via SOXS) has been a process of iteration; from SOXS-24-12, until now, SOXS-24-15 (not advice, not a recommendation).

All of those trades have been documented on this site.

Note: Enter the trade number (or, copy-paste) into the search window and then click on the sidebar to get chronology of all posts related to that trade.

With the SOXX, opening down, yet again, one has to ask; is there a trendline and if so, where is it?

Semiconductors, SOXX, Daily Close

I’m taking artistic license to draw where I perceive is the current right-side trendline.

Also note, this update is being released with about 90-minutes left in the session.

The closing price is yet unknown.

Going forward, price action itself will either confirm or negate the right side.

Positioning

As shown on the chart, the current (active) short trade, via SOXS, was opened last Friday at the ‘False Breakout’ (not advice, not a recommendation).

With price action continuing lower, it would be nice for this position to become a boring series of actions; moving the stop until the trend break and/or exit.

All the while, keep in mind, we don’t know what our ‘October Surprise’ is going to be … yet.

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

Massive Top (Reversal) … Merck

September 4, 2024 By in Biotech, David Weis, Dr. Elder, Drug Manufacturers, MRK, Semiconductors, Wyckoff

Right Along, With Semis’

Those ready (positioning) for this potential historic reversal in the major indices, are at long last getting the sense, ‘The jig is up’.

As Dr. Elder has said, ‘the markets will hypnotize you’. They will lull you to sleep and then reverse with a vengeance.

So, it may be with our example of the day, Merck (MRK).

No-Brainer … To Brain-Dead

Back in the day when posting on SeekingAlpha, Merck was a no-brainer amongst the grifter crowd.

Since fundamentals don’t move markets, and Merck continued to grind higher week after week, month after month, one could publish any amount of ‘research’ and look like a genius.

Oh, how times have changed.

As we’ll see below, Merck has been in a massive topping pattern, or Wyckoff Up-Thrust.

Merck, MRK, Weekly

There’s a lot going on with this chart.

It’s been about seven-months of grinding at the highs, only to break down on heavy volume the week of August 6th.

Then, it was five weeks of ratcheting higher in a test, reversing this week.

Note the testing action was in response to the wide high-volume bar.

As David Weis said in his video, wide high-volume bars tend to be tested; here we see evidence of that action.

As always, anything can happen and Merck could levitate higher. However, we can see just from the chart alone, that prospect looks like a low probability (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

September 3rd, 1929

September 3, 2024 By in 1929, Artificial Intelligence, Great Depression, Great Depression 2.0, Holiday Turns, NVDA, Prechter, Semiconductors, South Sea Bubble, SOXS, SOXS-24-15, SOXX

Top of The Market

Market Crash, 1929

Market reversals tend to occur just before, during, or just after a holiday week.

Is that where we are now?

Semiconductors (SOXX), and it’s chief cook and bottle washer, Artificial Intelligence (NVDA), may have already decided the next direction … down.

Semiconductors, SOXX, Daily

It’s just after the open and this is where we are.

“What do you see?”

Marking up the chart, we have a sell-short indicator (not advice, not a recommendation) right along with a hard stop location (as shown).

From yesterday’s update, those that watched the presentation by Robert Prechter Jr., were challenged with the idea, we’re in the largest bubble ever or at least since the 1720s South Sea Bubble (not advice, not a recommendation).

Positioning

In the sidebar, we can already see a short position was opened during last Friday’s session: SOXS-24-15 (not advice, not a recommendation).

Everyone has their own style and for me, I detest ‘chasing’ the market.

I’d rather make several attempts, get stopped out, then enter again, than watch the opportunity take off because I was too afraid to pull the trigger.

It’s only 20-minutes after the open and we can see the SOXX, is down hard.

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

Silver Surprise Continues … Down

September 2, 2024 By in Gold & Silver, Prechter, Semiconductors, SLV, SOXX 1 Comment

It’s An Industrial (economic) Metal

Things just aren’t working out for the silver bulls.

The metal is down yet another 1% in today’s session.

Not only that as we’ll see below, but we could also be in a downward trading channel as well.

Talk about a ‘hyperinflation breakout’ has all but disappeared and we’re back to the (very lame, by now) excuse that it’s all because of those evil ‘manipulators’.

Leaving delusion behind, back to reality, price action itself, this site’s been consistent for over five months.

That is, silver’s exhibiting characteristics of a downside reversal or sideways congestion (not advice, not a recommendation).

Silver SLV, Daily

From the chart above, we can see the right-side being confirmed over the past four or five sessions (black arrow contact points).

Also noted, there’s a Fibonacci time correlation between the intermediate high on July 11th and the right-side channel line contact on August 27th.

July 11th, was also the SOXX top.

About two decades ago, Prechter first proposed, ‘It’s all the same market’; meaning, that it’s the liquidity in the system that’s moving prices.

As that ‘liquidity’ dries up with more demand for cash (fiat, or not), the expectation is for the market indices to respond to that demand (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 Power Goes Out on Nvidia

September 1, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-15, SOXX 1 Comment

The ‘Natives’ Have Disappeared

Just like the kid frantically waving their hand in class (and never called on), Nivida price action may be doing the same.

As proposed in previous updates, we’re looking for signs that NVDA and the SOXX, are in ‘distribution’.

Is it ready, if not already, beginning a long and sustained decline (not advice, not a recommendation).

Going to a Fibonacci 8-Day chart, we have the following.

Nvidia NVDA, 8-Day

Price action has hit resistance in the 125 – 130, area.

The scary part is in the Force Index (middle panel).

The prior two price action thrusts had numerous (positive) ‘8-Day’ Force Index segments after that initial thrust.

That is, until this last move up.

After the first 8-Day Force Index segment, there are no more … it’s gone!

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

Red Pill … or … Blue Pill

August 30, 2024 By in Artificial Intelligence, Semiconductors, SOXS, SOXS-24-13, SOXS-24-14, SOXX

Will The SOXX Buck The Trend?

Pre-market action (as of 8:03, a.m., EST) in the SOXX is higher at 229.48, but below yesterday’s print high (SOXX 231.02)

During sustained uptrends, and by not printing a new daily low (SOXX 223.62), puts the SOXX in a potential bullish set-up (not advice, not a recommendation).

However, at the same time, we’ve hand what could be considered an initial leg down from all-time highs on July 11th, to lows, August 5th, then a corrective rebound, where we are today.

As we’ll see below, there are two scenarios … the ‘red’ pill and the ‘blue’ one.

Semiconductors SOXX, Daily

If the SOXX, posts a new daily high the short, SOXS-24-14, will be exited (yet again) to stand aside for the potential gap-fill (not advice, not a recommendation).

From a trading standpoint, it’s not unusual to ‘spend money’ to get into position if the potential reward is large enough.

Note, there has been no ‘money spending’ yet, as the last short trade SOXS-24-13, was profitable by about +4.9%

With the potential reversal of the largest bubble in world history, one could consider the downside opportunity in the SOXX, to be significant. 🙂

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

Persistence

August 29, 2024 By in Artificial Intelligence, Dr. Elder, NVDA, Semiconductors, SOXS, SOXS-24-14, SOXX, Wyckoff

Like a Terrier On A Mailman’s Leg

As of 3:10 p.m., EST:

The Cliff Notes version of what’s happening with the SOXX, is this:

NVDA, has not posted a new daily high.

However, the SOXX, pushed to a marginal new daily high, stopped out the short position and now appears to be in collapse (not advice, not a recommendation).

The new daily high for the SOXX, counts as a Wyckoff Up-Thrust and reversal to the downside.

That’s where we are now.

Positioning:

The amateur never gets back in once stopped out (per Dr. Elder). I have long since passed that mental block; repositioned short again (not advice, not a recommendation).

Trade is labeled as SOXS-23-14 … 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

Nvidia, ‘Whack’ & ‘Back’

August 29, 2024 By in Artificial Intelligence, NVDA, One Way Pockets, Semiconductors, SOXS, SOXS-24-13, SOXX, ZeroHedge

Distribution On The Way Down

It was a wild ride in the after-hours session and the pre-market.

As of this post (8:31 a.m., EST), NVDA is trading down about -4 pts., at 120.70.

The SOXX, is essentially flat, less than one point lower than yesterday’s close.

So, what to do?

Distribution

If Nvidia is following the script of typical market distribution, then it’s a low probability it will make a new daily high above yesterday’s 128.33.

With that said, the action is simple (but not easy).

Since there’s a position short, SOXS-24-13, the stop has been moved as shown in the chart below (not advice, not a recommendation).

Semiconductors, Leveraged Inverse SOXS, Daily

If Nvidia is in distribution, it will be interesting to see if price action follows the script as presented over a century ago, in One Way Pockets.

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 Signs of The SOXX

August 24, 2024 By in Artificial Intelligence, One Way Pockets, Semiconductors, SOXS, SOXS-24-13, SOXX, ZeroHedge 2 Comments

Has The Plug Been Pulled?

More distribution takes place on the way down, than on the way up.

From the book ‘One Way Pockets’, first published in 1917, analyzing actual client accounts and trading behaviors, we have this (paraphrasing):

‘It was from pullbacks of record high prices, where the most distribution took place’

It’s a psychological, repeatable, phenomenon. We know it today as ‘Buy the dip’.

The problem is, buy the dip doesn’t work when the trend changes from up to down.

All of which brings us to ‘Signs of the SOXX’.

Semiconductors SOXX, Daily Close

“What do you see?”

Marking up the chart, we see the SOXX, is potentially at the confluence of both resistance and trendline.

Another label for the possible ‘contact’ is:

The Danger Point®

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

With the Fed release taken as ‘good news‘, it’s reasonable to propose all the good news maybe already out.

Who’s left to buy?

The ‘Right’ Answer

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).

If that does not happen, and there’s buoyancy in price action, one can conclude there’s (seller) ‘absorption’ taking place at these levels.

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

Oil Bounce … Part II

August 23, 2024 By in Artificial Intelligence, David Weis, DRIP, DRIP-24-02, Federal Reserve, Great Depression 2.0, Interest Rates, IWM, Oil, Oil & Gas, Russell 2000, Semiconductors, SOXS, SOXS-24-13, SOXX, TZA, TZA-24-01, USO, XOP

Is This It?

We’ve gone form “Not Happening” to this morning’s action; ‘maybe it’s happening?’

As was done with Oil & Gas exploration XOP, we’ll now take a look at the oil patch itself and proxy, USO.

Oil tracking Fund, USO, Close

“What do you see?”

Marking up the chart.

We either have the ‘tradable bounce‘, or a potential contact point for the right-side channel line (not advice, not a recommendation).

The Fed announcement is just out, essentially accommodating a rate cut in September.

There was talk of some ‘cooling’ in the market (Ya think?).

With that, demand for oil seems like it would take a hit putting it lightly (not advice, not a recommendation).

Positioning.

The market itself is telling us where to go and what to do.

The important item for the day; what is the market not doing? Specifically, the Semiconductors, SOXX.

The SOXX, has not made a new (daily) high (at least, not yet) after the Fed’s announcement; it can even be seen as the ‘proverbial gut-check’, a la David Weis.

With that, all other positions have been closed save the short in the semiconductors via inverse fund SOXS (not advice, not a recommendation).

Danger Ahead

The ‘rate cut’ has yet to happen and September is a long way away.

It can’t be re-iterated enough how dangerous is this environment; prices stretched via a narrative that’s false (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