Category Archives: Semiconductors

SOXX: Gap Close, Then Lower

December 6, 2023 By in Positions, Semiconductors, SOXS, SOXS-23-10, SOXX

Look For Continued Downside Pressure

At the open, SOXX launched higher, closed its gap near 515.0, and then began an immediate retrace.

Price action has oscillated for the first couple of hours, testing the gap and attempting to move higher.

So far, it’s not happening.

If we get a lower close for the day, it’s likely to be nasty business for the bulls from here on out.

As this update is being created (12:08 p.m., EST), price action is getting nearer to posting negative for the day; currently trading at SOXX 510.50

Semiconductor SOXX, Daily

We’re using a bar chart as it’s easier to see the gap area that was closed early this session.

Warning: However unlikely, SOXX price action could begin to exhibit buoyancy for an attempted move higher; anything can happen.

Positioning

The short position, SOXS-23-10 remains active (not advice, not a recommendation).

From the original entry, SOXS position size has been increased by over 60%

At the close of the day, the stop is likely to be moved from its current level (SOXS 8.30), to just below today’s session low @ SOXS 8.38 (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

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

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 (Upside) Breakout … Fails

September 11, 2023 By in Artificial Intelligence, Positions, Semiconductors, SOXS, SOXX, Wyckoff 1 Comment

Now, It Gets Interesting

Not only has the upside at this morning’s open failed (as of 11:20 a.m., EST), we also have an ‘outside down’ (key reversal) that so far has exceeded the lows of the prior two sessions and the prior week’s low.

When A Move Fails

Failed moves get the attention of the street.

Whomever is on the other side of the trade, in this case the bulls, are potentially exhausted.

It’s still very early in the session and anything can happen.

However, the most likely outcome at this point is continued downside that may accelerate (not advice, not a recommendation).

Semiconductor SOXX, Daily

I have kept the trendline shown in the prior update intact.

What we may be looking at here, is an attempted trend breakout that has at this point, failed.

I have switched to an OHLC bar chart (instead of Candle) as the detail of the failed breakout is more clear.

The zoom area shows how price action quickly ‘gets itself back into line’ and rejoins the downtrend.

We’re now in a dangerous spot for both sides as price action is currently in Wyckoff spring position, having penetrated prior lows.

Probabilities point to more downside; let’s see what happens 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

‘The Economy Is Strong’

September 5, 2023 By in Natural Gas, Positions, Semiconductors, SOXS, SOXX, The Speck, UNG

… And Other Lies

It’s been a busy pre-market session; currently, 8:48 a.m., EST.

At yesterday’s evening open of the nat-gas futures (NGV23), it was decided to exit the UNG, position in the Tuesday pre-market, at the earliest possible (not advice, not a recommendation).

That exit was completed @ UNG 6.74

With that done, the focus tuned to the semiconductors.

Early this session (we’re still in the pre-market), the short position was increased via SOXS. Hard Stop remains at SOXS 8.97 (not advice, not a recommendation).

The ‘Strong Economy’ Backdrop

All of this positioning is taking place in the middle of a storm of propaganda.

It’s non-stop; every day, another pile of lies.

For just a hint of truth, check the links here and here.

U.S. food distributor stockpiles are dwindling rapidly (reference links above and more on that channel).

The big corporations are already getting ready for the next ‘We’re all in this together’, planned event as The Speck attempts to make its return.

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

Positioned At The Extremes

September 2, 2023 By in 1929, 1987, Artificial Intelligence, Mass Psychosis, Natural Gas, Positions, Semiconductors, SOXS, SOXX, UNG

‘Evidence Of A Struggle’

To minimize risk, you need to position at the psychological extreme.

That’s not necessarily the top or bottom of a move, but it could be.

At Opposite Ends

From a trading standpoint, this past week saw a lot of activity.

Trades entered, exited, some re-entered, some, not.

The net result was two positions in separate, non-correlated markets.

One was shorting the SOXX, via SOXS, the other, adding to longs in Natural Gas via UNG (not advice, not a recommendation).

Fake, Fraud & Thought Shaping

By far the main hysteria is in AI, and its cohort, the semiconductors, SOXX.

From my first trade way back in the spring of ’87, to now, I’ve never seen a mass psychosis mania, fueled by propaganda, lies and made-up numbers, like this.

One can only guess where or when the shoe will drop that starts the whole (mind-shaping) scheme unraveling.

Evidence Of A Struggle

When price action pushes above or below established resistance or support, it’s at The Danger Point®

When that happens, depending on the action itself, the risk of being wrong (on an opposing position) is lowest.

The SOXX may be there now.

Semiconductor SOXX, Hourly Chart

It’s clear, a battle’s going on between bulls and bears at resistance (blue line).

Just before, during, or just after a holiday week tend to be pivot points in the market.

Said many times on this site, the most famous of these was September 3rd, 1929, the Tuesday following the Labor Day Weekend.

That was the all-time high, just before the crash.

Positioning

There are two positions open, each with a tight stop (not advice, not a recommendation)

Long UNG; Hard Stop @ 6.93

Long SOXS (short SOXX): Hard Stop @ 8.97

Now, we wait.

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

From ‘Hype’ to ‘Opportunity’

August 31, 2023 By in Artificial Intelligence, Positions, Semiconductors, SOXS, SOXX, Wyckoff 1 Comment

What A Difference A Day Makes

Update: 9:50 a.m., EST

Exited SOXS @ Stop 9.05, then re-entered after the open at 9.19.

Hard Stop @ Session Low 8.97 (not advice, not a recommendation)

SOXX, price action pushed above well-established resistance and so far, has failed to hold.

After hours has the SOXX, trading down -2.45-pts. (as of 7:30 p.m., EST) which gives us a hint there may be a new daily low at the next session.

If so, it’s a Wyckoff Up-Thrust, a reversal, with significant potential for downside.

Positioning

Already short this sector via SOXS with hard stop at the session low of SOXS 9.05 (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 … 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

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, 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

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 Pivots Down … Again

August 18, 2023 By in Positions, Semiconductors, SOXS, SOXX 1 Comment

New, Sharper, Downtrend?

Has the semiconductor SOXX, sent us a signal that’s it’s in a new steeper, downtrend?

The last update said probabilities favored continued downside for SOXX (upside for SOXS).

If there’s been a more aggressive pivot down, that trend looks like it’s being tested during today’s session.

We’re about two hours before the close; both the SOXX and its inverse SOXS, are posting reversal bars.

If the reversal’s going to be confirmed, there needs to be follow-through. That means, the next session (Monday) is the important one.

Since I am maintaining short this sector (not advice, not a recommendation), we’ll look at that position using the leveraged inverse SOXS.

Semiconductor Leveraged Inverse SOXS, Daily

The original trendline is shown from the prior update.

The dashed line is a potential new more aggressive trend.

If Monday opens gap-higher for SOXS (lower for SOXX), and then posts a new daily high, it’s a potential confirmation of that new trend.

Positioning.

Short via SOXS remains intact.

Hard Stop has been moved to SOXS 9.93 (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

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

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