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.
The day started out with a bang; market’s up sharply on CPI print.
One could think, months of biotech (short) analysis, has been blown apart with this morning’s sharp move (not advice, not a recommendation).
Remember, this update said watch out for ‘French’ guys:
“However, just like the video snippet in the link above, what looks to be a dramatic conclusion to weeks if not months of work, could be completely derailed by a bunch of ‘French’ guys hanging out in a British castle.”
Well, here they are. 🙂
From a trading, positioning perspective, is it really that bad, what’s going on?
For that answer, we’re going straight to the hourly chart of 3X Inverse Leveraged Fund LABD.
Biotech 3X Leveraged Inverse LABD, Hourly
Early morning price action penetrated the stop level given in this update.
However, as can be seen, price action behavior of LABD was different than (inverse fund) SOXS, under similar conditions; it did not keep going lower but stopped dead.
It’s clear, action at this point, is pulling away from the lows.
Rate Cuts Not
Way back in January of 2023, this site proposed the ‘rate cut’ discussion was nothing more than a ruse; keeping everybody (the press, especially) busy acting like Pavlov’s Dogs, while the big rug-pull was being set-up.
With that in mind, here’s the real story of what’s going on (not advice, not a recommendation).
Positioning
In a little bit of a market ‘cheat’, LABD is currently trading above the prior stop level.
At the risk of making a gross trading error, the short position in biotech (via LABD) is being maintained (not advice, definitely not a recommendation).
However, even as this post is being created (3:15 p.m., EST), biotech XBI continues to erode back into the trading range with LABD, continuing to rise.
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.
Having been through the crash of ’87, ’98, ’01, ’08, and now, the feeling is similar.
Each time the vehicle (stock) is different but also the same, at the same time.
In case anyone wants to review, here’s the definition of ‘bag holder‘.
Is Now, The Time?
Previous analysis and potential top identification for NVDA, has been premature.
With that in mind, presented below are two charts.
One has the Fibonacci count from the October ’22 lows; the other, shows a trading channel overlay.
The inference is, we’re close to some kind of ‘event’ whether it be sideways congestion or reversal (not advice, not a recommendation).
Nvidia NVDA, Weekly
It appears, since the October ’22 lows, NVDA is being influenced by a Fibonacci sequence.
The ”close’ chart has the same Fibonacci count as well as the current trading channel.
Next week is ‘Week 88’, stock-split (10 to 1), as well as the Fed meeting.
Week 88, is within the margin of error for a precise Fibonacci count, Week 89.
With NVDA, at the top of its trading range, one needs to be on the lookout for some type of Fed/Stock-Split ‘overshoot’ or other indicator of potential upside limit (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.
The Danger Point® 