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 get to the ‘independent source’, a quick review of the June 21st, update (emphasis added):
“With the prior update letting us know the air is going out of support for continued A.I., today’s action may be a significant reversal (not advice, not a recommendation).”
That was based on a wide gamut of data with none of it, ‘fundamentals’, except ‘the money’s gone’; the conclusion, NVDA, may be at a significant inflection point (not advice, not a recommendation).
All of that, on this site, right here in River City. 🙂
Independant Source
Now, we have this from Ed Dowd, link here (time stamp: 5:45, 8:30, and 9:40) saying NVDA, had an ‘exhaustion top’, posting on two timeframes.
Note: Wyckoff analysis, with its century-old technique, is coming to the same conclusions as the Wall Street ‘number crunchers’ with near-infinite computing power.
Now, on to the chart.
Nvidia NVDA, Daily
The trading channel (blue lines) is potential only, not confirmed.
What we do have, is once again, NVDA being influenced by Fibonacci time-correlation(s).
Nvidia reversed on Fibonacci Week 89, from the October 14th, 2022, lows.
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.
This update will show why there’s a probability for lower open, lower price action, and/or ‘island-gap-reversal’, for the SOXX, at the next session.
With the understanding that ‘anything can happen’, let’s get into the SOXX price action, along with chief cook and bottle washer, Nvidia.
Market Reversal?
First off, does anyone expect a significant reversal?
Following the breadcrumbs, here’s a link from the comments section posted during a livestream by Uneducated Economist; go to Time Stamp 23:45.
Note: The second link is not from Simon (Uneducated Economist) himself but obtained from snide remarks made to him during his livestream.
Using the timestamp, judge for yourself.
My takeaway is:
They don’t know. The amount of time wasted ‘crunching the numbers’ is mind numbing. Number crunching is easy and that’s why (nearly) everyone does it.
Reading price action (effectively) is hard and that’s why you’re here. 🙂
Semiconductors SOXX, Daily Candle
The chart highlights the ‘island-gap’ potential.
However, the real story is in the second chart, Nvidia.
Remember that markets tend to alternate. Last time, is not this time.
The last time Nvidia had a significant outside-down, it went into consolidation before moving higher.
Nvidia NVDA, Daily Candle
Looking at the chart, ‘this time’, is already different.
From the 10:1 split, to outside-down, is Fibonacci 8-Days.
Last time there was a wide outside-down (March 8th), the next day was narrow range, volume decreasing,
This time, we have narrow range, volume increasing.
The Higher Probability
Taking it all into account, the higher probability is for continued downside. It’s a probability, not a guarantee.
If we get upside at the next session, then it’s time to stand aside, re-sharpen the pencil and start looking for another reversal potential (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.
It’s not hyperbolic to say, what’s happening to Nvidia right now, has never happened before.
As we’ll see on the chart, the market itself proves that point.
Work has already been done (here, here, here and here) on why Nvidia, may be at a significant inflection point (not advice, not a recommendation).
Now the smoke has cleared from Friday’s session, we can look at what happened and what’s likely to happen.
First, we’ll use a Fibonacci 8-Day, chart.
Why? Because nobody else uses one. 🙂
Besides being a Fibonacci number (just like the Weekly, at 5-Day), the 8-Day, seems to show the potential better (at this point) than other timeframes.
Nvidia NVDA, 8-Day
Let’s go all the way back to the beginning and why the current situation is unique.
NVDA, started trading the week of January 22nd, 1999.
During that span, there are no two Force Indicator occurrences (shown below) at this level of energy.
In fact, there are no Force Index prints at this level, ever.
The only print that comes close is also shown on the chart, occurring in late May, of ’23.
An astute observer can instantly see the trouble or potential trouble.
During the consolidation period from mid-March to late April, Force Index declined and eventually posted negative.
That temporary wash-out provided fuel for more upside.
Now, price is rising with force declining, at the same time.
The inference, the rally is weak if not extremely weak.
Let’s not forget, the ‘old-timers’ say it’s the biggest bubble they’ve ever seen.
Couple that with NVDA, having already launched from bottom to top, 1999 – to- Latest Highs, a massive 469,000%.
Time permitting, in the next update, we’ll look at the potential for an ‘Island Gap Reversal’, in the SOXX.
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.
No one knows if this is ‘The top’, or just ‘A top’, until it’s all over (not advice, not a recommendation).
This update for Nvidia, said we’re nearing Fibonacci Week 89 (from the October ’22, lows); look for evidence of a reversal.
With three-hours left in the session, NVDA is on track (along with the SOXX) to posting a weekly reversal bar.
Nvidia NVDA, Weekly
The chart updated to show we’re at ‘Week 89’.
The fact (minus 3-hours) we’re getting a reversal bar on ‘Week 89’, is potential validation of the Fibonacci count.
The market itself is telling us where to look.
With the prior update letting us know the air is going out of support for continued A.I., today’s action may be a significant reversal (not advice, not a recommendation).
Update: 2:07 p.m., EST
Housekeeping Note:
While under no obligation to discuss trades, nonetheless, for those following the biotech short (LABD-24-12), that trade has been exited (for now) with profit (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.
Markets reverse in a typical way; first is ‘sentiment’, then ‘volume’, then ‘price’.
According to this link, looks like we have sentiment aplenty; evaporating sentiment, that is.
As stated by Mr. Fred Hickey, VC (Venture Capital) funding peaked last year and has dropped over 75%, since then; that’s the ‘sentiment’ part of the equation.
A partial synopsis of his interview, in the link above:
Time Stamp:
9:15, The greatest bubble I’ve ever seen
11:15, It’s all happened before
11:40, Narrowing market
11:55, Volume decline
16:30, Honeymoon phase is over
17:50, VC spending down 75%
18:05, Everyone knows it’s a joke (except, Wall St.)
And on it goes …
Where’s The Top?
From a Wyckoff perspective, using his analysis (here and here) as a basis of speculation, that’s the wrong question (not advice, not a recommendation).
If we’re expecting some kind of massive reversal (which we are), then the objective is to look for the weakest sectors, not the strongest.
Frequent users of this site already know that work’s been done. One of, if not the weakest sector(s), is Biotech (not advice, not a recommendation).
Is Today, The Day?
With that said, as this post is being created (1:20 p.m., EST), the sector at the center of bubble attention, the SOXX, may have just completed a wedge ‘throw-over’.
Semiconductors SOXX (ETF), Daily
Any number of scenarios can be in play.
At this point, the SOXX, may be in the process of validating the terminating wedge (not advice, not a recommendation).
As Fred Hickey said, it’s the biggest bubble he’s ever seen.
By the time it becomes obvious, it’s way too late for (low-risk) positioning.
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.
Looking the daily chart, it’s clear, upward action is running out of steam.
Nvidia NVDA, Daily
Missing from the chart is a new daily low to help confirm that we’re at least in a congestion or setting up for a significant reversal (not advice, not a recommendation).
As we saw in yesterday’s update with bullet item No. 7, it’s all about the numbers.
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.
In the pre-market, the SOXX is up about +1.29%, trading at 236.90.
As discussed in the ‘comment’ section of the prior update, if last Friday was short covering, the expectation was for a lower open.
So, far it’s not there, or there’s more ‘covering’ to go.
From a Fibonacci standpoint (shown below), pre-market action is near the 61.8% retrace.
Semiconductor SOXX, 15-minute
As of this post (8:15 a.m., EST) SOXX is trading at the Fibonacci level (small black ‘brackets’ on the chart).
We can see that area is also resistance.
In-n-Out
This is what working at ‘the edge of the lake’ is all about.
Price action has not shown decisively whether it will continue higher or if we’re in a reversal.
A decisive push past Friday’s SOXX high, 237.35, likely means it’s going to attempt to close the gap left from the May 29th open (not advice, not a recommendation).
Looking at it both ways, the risk on a short position is being lowered further, or we’re on to new summertime highs (like August 1987) before potential reversal.
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® 