Category Archives: SOXX

A Tale Of Two Tops … Nvidia

June 22, 2024 By in Artificial Intelligence, NVDA, Prechter, Semiconductors, SOXS, SOXS-24-09, SOXX

The Rule of ‘Alternation’

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.

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 Split Top … Part II

June 21, 2024 By in $SPSIBI, Artificial Intelligence, Biotech, LABD, LABD-24-12, NVDA, Semiconductors, SOXS, SOXS-24-09, SOXX, SPBIO, XBI 2 Comments

Reversal On ‘Week 89’ ?

The tape is saying ‘This could be it’.

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).

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. Money’s Down The Drain

June 20, 2024 By in Artificial Intelligence, Biotech, Semiconductors, SOXX, Wyckoff, Wyckoff Stock Market Institute 2 Comments

The Plug, Has Been Pulled

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.

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

It’s ‘Week 89’, for NVDA

June 17, 2024 By in NVDA, Semiconductors, SOXX 1 Comment

Then, There’s The Lawsuit

Did we just hear ‘The Bell’, the top, for Nvidia?

The last update said to watch for Fibonacci correlation as NVDA, nears Week 89.

This week is that week; today, price action was gap-up higher, then reversal.

It could all amount to nothing with NVDA continuing higher at the next session.

Then, there’s the lawsuit; an old one, that’s been revived.

Is it important or is it an ‘Archduke Ferdinand‘ event?

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.

Is Fibonacci ‘Week 89’, that number for NVDA?

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

‘Adverse Moves’ … Action Plan

June 12, 2024 By in $SPSIBI, Biotech, Federal Reserve, Interest Rates, LABD, LABD-24-12, SOXS, SOXX, SPBIO, Uneducated Economist

What To Do When ‘Whacked’

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.

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 Nvidia (Split) Top

June 8, 2024 By in 1987, 1998, 2000 - 2001, 2007 - 2008, Artificial Intelligence, Federal Reserve, NVDA, SOXX 3 Comments

Top of The Tops?

Here … ‘Hold this bag’.

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).

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

Biotech … Hits Target

June 5, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-12, SOXX, SPBIO, Spring-to-Up-Thrust, XBI

Meanwhile, On The Other Side …

While the SOXX fights it out between bulls and bears, biotech XBI, has quietly penetrated resistance … and stopped.

Price action’s currently hovering above resistance in a narrow range.

The prior update showed the likely outcome for a spring-to-up-thrust target.

It’s arguable that we’re here now (not advice, not a recommendation).

Biotech XBI Daily

The upside penetration is not all that convincing.

That could be good or bad depending on one’s viewpoint.

Is there no more energy left or is the XBI just hesitating before moving higher?

If we pull back to the longer, weekly timeframe and recall, all of this action may be just a ‘test’ of a larger (timeframe) up-thrust.

That marginal energy would correlate with limited upside during a potential breakout (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 … Bump & Run

June 5, 2024 By in Semiconductors, SOXS, SOXS-24-07, SOXX 1 Comment

Exit Or Not?

Trader Discretion.

SOXX hit the stop level (just barely) listed in this post.

We’ve all heard the stories of getting stopped out just as the market took off.

Is that what’s happening now?

From a personal standpoint, I am maintaining the SOXX short (via SOXS), but will have to monitor the action throughout the day.

If there’s no significant retrace lower, or we post another daily high (low on the SOXS) the trade is closed (not advice, not a recommendation).

Update: 10:35 a.m., EST

Trade is exited for now. Watching closely to see if gap is closed or intraday reversal (not advice, not a recommendation).

Semiconductors SOXX, Daily

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

Stops … How & When

June 3, 2024 By in David Weis, Dr. Elder, SOXS, SOXS-24-07, SOXX 1 Comment

The SOXX Example

‘Set the stop and walk away’.

Those familiar with the David Weis trading video, know that phrase well.

The entry analysis is done, the trade entered and now, the management of that trade (not advice, not a recommendation).

The SOXX & The Stop

We’re only part way through today’s session; it’s already been a very busy day for the SOXX.

A gap-up open that was quickly retraced. Now, we’re trading lower, hovering around 231.50

Elder said years ago, ‘when the market is at a reversal point, there’s a lot of turbulence’.

We have that for sure in this case.

Moving on to the chart

Semiconductors SOXX, Daily

Stated in a prior update, a short position on the SOXX would have an initial stop of 243.63.

As a result of this morning’s action, it’s reasonable to move that stop lower (not advice, not a recommendation).

The reason to move lower so quickly, has been defined by the market itself.

We’ve already had a sharp opening gap-higher where the bulls (may) have given it all they have.

That level was quickly retraced, inferring the bears are (now) in control.

If that level is threatened, SOXX moving higher, then bulls have regained control, likely to move higher, still.

There’s nothing else but ‘set the stop and walk away’. 🙂

Of course, if one is using the leveraged inverse fund SOXS for a short position, the stop level chosen would correspond to the SOXX, above (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

The SOXX, Looking Both Ways

June 3, 2024 By in 1987, Semiconductors, SOXS, SOXS-24-07, SOXX

Narrowing Risk or Preparing For Higher?

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.

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