Category Archives: SOXS

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

Positioned For Trouble

August 3, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-16, SOXS, SPBIO, Wyckoff, XBI, ZeroHedge 1 Comment

When The Tide Goes Out

We all know the quote attributed to Buffett:

‘When the tide goes out, that’s when you find out who’s been swimming naked’.

Or, to put it another way:

‘Everybody’s a genius in a bull market’.

Well, ladies and gentlemen, here we are.

We’re about to witness what method’s best suited to handle typical ‘price destruction’ behavior of a bear market (here and here) along with possible chaos in commodities.

That challenge also includes this site of course.

Bear Market Behavior

If we’re really entering a bear market, prices typically do not go straight down unless there’s an outright crash.

No …Bear markets are all about what’s called ‘price destruction’.

That is, price action whipsaws a near infinite number of times; getting into (a short) position for the downside or (long for) an upside squeeze is incredibly difficult.

The most recent example of this was the volatile whipsaws in 3X leveraged inverse fund, SOXS:

Swings over +/- 20%, back-to-back in days if not hours.

With that said, we’re looking at biotech XBI, to see if there’s a chance of it being ‘well-behaved’ during a decline (not advice, not a recommendation).

Biotech XBI, Weekly

On a weekly close basis, we’ve had a double top.

Using the MACD, it shows momentum weakened on the leg up to the second top.

Watching price action (the tape) of XBI late Friday, near the close, it gave the appearance of short covering.

Upward spikes that appeared to be labored.

If that’s true, then a lower open at the next session would be the expectation (not advice, not a recommendation).

Taking Action

As the disclaimer states, this site is ‘not certified’ by the SEC and does not, cannot provide any advice.

What it can do, is infer the actions being taken.

With that said, this update shows the ‘category’ side bar with LABD-24-16, thus inferring a short position via LABD.

That’s the firm’s identifier used for spreadsheet tracking; the 16th biotech short via LABD, for the year.

Never Too Early, To Trend

In the next update, we’ll discuss how even in the early stages of (potential) XBI reversal, we may already have a trendline.

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 ‘Squeeze’ That Didn’t

July 31, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-16, SOXS, SOXX, SPBIO, XBI 2 Comments

Biotech Refused To Play

During today’s Fed induced squeeze, one index was noticeably stubborn.

Biotech looked like it was going to play along.

However, as the regular session wrapped-up, biotech XBI, retraced, proceeding all the way down to close near its prior day’s close.

Biotech XBI, Hourly

The hourly chart shows the initial squeeze that didn’t.

The last hour had significant volume, indicating the potential for more downside at the next session (not advice, not a recommendation).

Contrast performance of leveraged inverse semiconductors SOXS, at a massive -20.21%, loss on the day to leveraged inverse biotech LABD, at just -0.34%, loss for the day.

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

Targeting, Taiwan Semi (TSM)

July 23, 2024 By in Semiconductors, SOXS, SOXX, TSM, Wyckoff

Once A Trend Is Broken …

According to Wyckoff principles;

‘Once an up-trend is decisively broken, the market will (typically) attempt some kind of rally to test the break’.

Looking at the daily chart of Taiwan Semi, TSM, there’s no doubt the uptrend has been broken.

Taiwan Semi, TSM, Daily

The amount of (daily) down-force exhibited on the July 17th, trend-break, was the most ever for TSM.

With such a massive down-force, we’re in uncharted territory. The test, if it comes can complete at any level.

Currently as of 1:25 p.m., EST, TSM is trading at 170.6, near the 23.6%, retrace.

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

Nat-Gas is Back

July 22, 2024 By in Natural Gas, South Sea Bubble, SOXS, SOXS-24-12, SOXX, UNG, UNG-24-11

Reversal Action

Price action detailed below, shows upside reversal (not advice, not a recommendation).

It’s been a while since the last update on Nat-Gas, UNG.

Since then, price action sliced through support (shown in the update), posting new lows.

However, over the past week, the character has changed.

Natural Gas, UNG, 3-Day

Today is ‘Day 3’, for the chart’s price bar; tomorrow’s action begins a new ‘3-Day’ bar.

At this juncture, the prior three-day move to new (daily) lows has been negated with today’s action.

If positioning long, the obvious stop level would be the low of the current three day bar at UNG 13.89 (not advice, not a recommendation).

Anything Can Happen

The past two weeks has shown us, in no uncertain terms, that anything can happen.

So, it is with the markets.

Nat-Gas has been bouncing around historical lows for some time; plenty of time to wear out any (remaining) bulls.

SOXX Housekeeping

While under no obligation to discuss open (or closed) trades, as a courtesy, today’s price action forced closure of SOXX short trade; SOXS-24-12

Total profit on the trade, having twelve separate entries and one exit (today) was just over 19%.

We’re potentially at the top of the largest mania in history save the South Sea, expecting things to go in a straight line is (apparently) not realistic. 🙂

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

How To Use ‘Seasonality’

July 21, 2024 By in Livermore, Seasonality, SOXS, SOXS-24-12, SOXX, Trump, ZeroHedge

Three Months of Down

For the next three-months, until the end of October, the (net) seasonality of the markets is down.

That’s not all.

According to this link, we have a bevy of technical and fundamentals suggesting the overall direction of the markets is to lower levels (not advice, not a recommendation).

Lower is good … at least if one is positioned short.

With that, we’ll look at the semiconductors, SOXX, to see how seasonality might help on a (potential) short position.

Semiconductors SOXX, Daily

If the channel remains intact, we’re still at the beginning.

Of course, the very next session can completely blow this analysis apart. That’s the way of the markets.

For now, however, we do have a channel, we do have the above-mentioned seasonality; probability and pressure is to the downside (not advice, not a recommendation).

Turkey & Position

For those familiar with ‘Reminiscences‘, and ‘Turkey’, a.k.a. Mr. Partridge, we should all know the importance of maintaining position.

The objective, therefore, is to attempt to maintain a short position (via SOXS, or other short) as long as possible, given the trading channel and bearish bias (not advice, not a recommendation).

Simple But Not Easy

One of the very first things the Online Trading Academy (Dallas) told their class back in the day, working the markets with a profitable plan of action should be ‘simple’.

They also said, the problem is, it’s not easy.

Here’s just one unrelated example of a simple job (i.e. ‘protection’) that’s obviously, not easy.

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 A.I. Rope … Just Broke

July 17, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-12, SOXX, TSM, ZeroHedge

So, It Begins

SOXX, pre-market, down a solid -3.2%.

Taiwan Semi (TSM) is the primary reason with its own trading down over -5%,.

If this really is the top of the A.I. bubble, the potential (now apparent) reversal was covered well in advance, here, here, and here.

If this is not the top and there’s more to go, the SOXX would need to retrace significantly, find support and thrust energy to mount another rally (not advice, not a recommendation).

Note: MACD indicators are bearish divergent on both daily and weekly.

Making It Up, As We Go

Of course, the press has to make up a reason for the pre-market rout. So, for today, we have this and this.

Tomorrow is a whole ‘nother story, literally 🙂

Semiconductor SOXX, Weekly

The blue arrow notes only one other time (in history) in the SOXX, where downward thrust exceeded that of week ending, April 19th.

Otherwise, we have the usual suspects: Terminating wedge, dissipating energy, Fibonacci correlations for chief cook and bottle washer Nvidia, link here.

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