Category Archives: SOXS-24-13

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

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

SOXX, Pre-Market … Higher

August 28, 2024 By in Artificial Intelligence, NVDA, SOXS, SOXS-24-13, SOXX

Not Good For The Shorts

As of 7:34 a.m., EST, The SOXX is trading unchanged to slightly higher.

From yesterdays close, with forming a minor spring set-up (shown below), today, there’s only one right answer for the shorts.

That answer: The SOXX, needs to open lower and post lower (not advice, not a recommendation).

More importantly, it can’t post a new daily high or SOXS-24-13, trade will be exited (not advice, not a recommendation).

Semiconductors SOXX, Daily

Price action is still at the edge of the lake, where anything can (easily) happen.

The SOXX, has formed a minor spring set-up but the expectation is for that set-up to fail with a lower open and lower post (not advice, not a recommendation)

Nvidia is scheduled to release earnings after the close.

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

August 25th, 1987

August 26, 2024 By in 1987, 2007 - 2008, Artificial Intelligence, Bonds, Dow 30, NVDA, SOXS, SOXS-24-13, SOXX, Uneducated Economist

All Time High (and reversal) For DJIA

Everybody seems to talk about the crash of ’87, as if it suddenly appeared out of nowhere, October 19, 1987.

Digging deeper, the crash started months earlier, at the market peak on August 25th.

One may consider today, Monday, August 26th, the 37th anniversary of that top; when by chance, we’re at another all-time high.

By now, most of us are tired of The Gong Show style prognostications:

‘Crash this’ and ‘crash that’, ‘the dollar’s going to collapse’ and there’s that! 🙂

At this point, none of those things have happened … yet.

In fact, the ‘collapse’ may actually be of a different sort this time around; posed by Uneducated Economist, link here (time stamp: 2:04).

Real & Separated

We may indeed get an ’87 or ’07, type of collapse, eventually.

Or, it may be that sectors wipe-out individually.

However, as UE points out (above, link), the ‘crash’ this time is hidden. It’s the separation of wealth from the ever more have-nots, to the haves, and have-more.

The (Biggest) Bubble

As the Dow Jones is making an historic high, possibly the biggest bubble of all time, the A.I. bubble, led by NVDA, and the SOX Index (SOXX, tracking ETF), peaked out on July 11th (not advice, not a recommendation)

When we last left the SOXX, with this update, link here, it had this to say (emphasis added):

“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).”

Well, ladies and gentlemen, that’s exactly what happened.

The SOXX, posted a new daily low, closing down -5.86-pts., or -2.51%.

Nvidia is scheduled to release earnings this Wednesday.

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 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

Pulling Back … The Curtain

August 22, 2024 By in Artificial Intelligence, Federal Reserve, Interest Rates, Semiconductors, SOXS, SOXS-24-13, SOXX, ZeroHedge

The Truth Comes Out

Here’s a different take on Wall Street’s ‘outrage‘ over a year’s worth of fake jobs data.

No, the outrage is not about the data being fake, the outrage may be the curtain has been pulled back, allowing the public to see the truth.

That truth, discovered by Wyckoff back in 1902, was price action has no connection to so-called economic numbers.

In fact, he said (paraphrasing):

‘Dynamics were operating on prices that had no relation to any fundamentals.’

If market action really was based on fundamentals, an historic revelation of 818,000 fake jobs, would have sent the indexes into a frenzy, which did not happen.

In fact, nothing happened

Now, we have ‘The Street’ putting the pieces back together (trying to re-hypnotize their clientele) and come up with another fake narrative; surely, the Fed will lower rates this time … honest!

Well, let’s leave the clown show (for now) and get back to some real, reality, the A.I. bubble.

Semiconductors SOXX, Daily

What do you see?

If you’re a long-time visitor (welcome back), by now, your market recognition should be near instant.

That is, we have a Head & Shoulders pattern (not advice, not a recommendation).

Nothing is ever perfect in the markets, but this one is near textbook.

Positioning

Shorting this sector is more than a little dangerous.

Just take a look at the gaps, volatility, huge percentage swings up and down, with leveraged inverse fund SOXS.

With that said, and with the danger in mind, a potential low-risk short (via SOXS) was established early this session.

The trade is labeled, SOXS-24-13, with a stop at the day’s low of SOXS 20.63 (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