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.
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.
Like something straight out of The Princess Bride, this morning’s Broadcom (AVGO) explosion, probably doesn’t mean what the ‘investing’ public thinks it means (not advice, not a recommendation).
The link above, tells us AVGO, has launched higher on a ‘bold A.I. forecast’.
A Forecast !!! … what maybe could, or might happen in the future, if nothing bad happens along the way, … maybe.
Well, let’s go to the sector itself, the SOXX, and see what the market’s really telling us.
Semiconductors, SOXX, Daily
The bubble trend break discussed here, remains intact.
Any number of notations can be made on this chart.
There’s a downtrend line from the October 15th high (not shown), with today, as the fourth hit on that line.
The low of November 27th, to today, could be classified as ‘spring-to-up-thrust’.
The list goes on.
However, the main point, and to leverage on yesterday’s update, is this:
If the building blocks of economic activity (Basic Materials) are in a (potential) long-term reversal, how are any of these so-called A.I. ‘data centers’ and the associated infrastructure going to be built?
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.
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.
Watching the SOXX, price action in real time, is like a slow-motion train wreck.
The trendline shown below, was broken two weeks ago.
Since then, we’ve had an upside test.
As of the close today, that test appears to be complete (not advice, not a recommendation).
Semiconductors SOXX, Weekly
Frist, the break and test.
Next, we’re at Fibonacci Week 21, from the all-time highs and reversal.
All of this suggests some type of inflection point.
Positioning
As of today’s close, the original entry (SOXS @ 19.98) for SOXS-24-20, is up a solid +17.67%.
Since that entry, other smaller trades (eight in total) have been profitable, thereby reducing the price-level, increasing the gain, of the original entry (not advice, not a recommendation).
We may be at the point, where that ‘slow-motion train wreck’, begins to pick up steam.
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 next down-leg in the SOXX, and A.I., bubble, may be at hand (not advice, not a recommendation).
Many factors coming together; Fibonacci projections, retrace levels and time sequences; price action posting and defining trend lines and trading channels.
With that, let’s take a look at what the SOXX, is saying about itself.
Semiconductors SOXX, Daily
We’re half-way though today’s session, anything can happen. Even so, the test and reversal are clear.
What also may be in the making, is the verification of the trading channel shown.
The channel has its own Fibonacci count(s).
One part, Fibonacci 5-days wide, another, Fibonacci 8 days, for a total of Fibonacci 13-days.
Positioning
For those following this site on a daily basis, you already know, this sector’s been sold (short) via leveraged inverse fund SOXS (not advice, not a recommendation).
Trade number is, SOXS-24-20, in the sidebar, above.
The short was initiated with this update, shown above in the chart. It was maintained throughout the gyrations of the ‘election’ and aftermath.
Now, we wait.
If nothing else, and the trade falls apart, today’s session high in the SOXX, is an excellent place for a stop (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.
After the ‘test’, is that when the plug is pulled?
It’s the market’s job to frustrate (nearly) every single participant, bull or bear, into submission, into giving up and exiting just before the real move gets underway.
How many times have you heard (or experienced) the following:
“The market stopped me out, then took off for a huge gain … without me”.
Experience (i.e. many losses) is the ability to know when the trade (premise) is broken or just going through a test. 🙂
Looking at the SOXX, it’s a compelling (test) picture (not advice, not a recommendation).
Semiconductors SOXX, Weekly
Prior updates (here and here) have shown the similarities of the A.I. bubble to the dot-com bubble of the 2000s.
One of the events watched for, was the ‘trend break’.
As of today, the market is currently testing that break.
The fact we have a new weekly (retrace) high as well, presents a Fibonacci time correlation.
This week is Fibonacci 21-weeks from the all-time-high in the SOXX.
A downside reversal from this point may indeed tell us, ‘The plug has been pulled’ (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® 