The Set-Up, Again
Last Friday, CDNS printed and closed at all-time highs.
Looking at the chart, it’s the all-familiar pattern (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Hourly Numbers
When you add it all up, if the SOXX was going to reverse from all-time highs into a sustained correction, Friday’s close would be a good place to start (not advice, not a recommendation).
Prior updates have been consistent with the (Wyckoff) premise, upward thrusts are covering less net distance.
SOXX Hourly Details
First, the markets are fractal.
We see the same repeating pattern of ‘spring to up-thrust’, on the hourly as on longer timeframes.
Second, tops and bottoms are different.
The characteristic of the ‘spring’ bottom and the ‘up-thrust’ top are how markets behave.
Bottoms, ruled by fear, typically sharp and well defined.
Tops, ruled by hope, typically wide and rounded.
Semiconductors SOXX, Hourly
The top shown above, is what David Weis used to call, The Danger Point®, where risk (cost) of being wrong (on a short, in this case), is least.
In his video, he points out this type of action, saying ‘the market could just keep on going … so what’.
His meaning was, it’s the point where there’s instability, therefore, potential for reversal (not advice, not a recommendation).
For those who don’t have that video, it is timeless wisdom, still available here.
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The Danger Point®, trade mark: No. 6,505,279
And Then?
For the past two weeks, the SOXX has been discussed within the context of ‘shortening of the thrust’.
That’s a Wyckoff adage:
‘When a move is nearing its end, the amount of net progress (between waves) will become shorter’ (not advice, not a recommendation).
Even though the past four trading days have closed higher, SOXX net upward progress, is still getting shorter.
Semiconductors SOXX, Daily Close
Next update, we’ll move closer-in to the hourly.
That timeframe shows a clear ‘spring to up-thrust’ set-up (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
While Nvidia Erodes, After-Market
Five trading days ago, On Semi, posted its all-time high.
The difference between ON, and semi leaders like, NVDA, TSM, and AGVO, the prior all-time high for ON, was years ago, back in July of 2023.
Since that time, it’s been in a wide trading range.
ON Semiconductor, ON, Daily Close
The standard set-up, seen many times, labeled as ‘spring to up-thrust’ (not advice, not a recommendation).
Depending on how price action goes from here, we’ll update accordingly.
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The Danger Point®, trade mark: No. 6,505,279
Earnings Release
With anecdotal evidence the ‘gig’ economy is having trouble, link here, Uber is at resistance.
Earnings were released before the regular open; the response was a gap higher.
That gap and subsequent action, shown below.
Uber UBER, Daily
Volume was heavy, indicating the potential for continued upside (not advice, not a recommendation).
The chart shows we’ve just penetrated well-established resistance; now, slightly below the 38.2%, retrace level.
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The Danger Point®, trade mark: No. 6,505,279
From, All-Time Highs
If it holds, it’s an island gap-down from all-time highs.
The repeating spring to up-thrust set-up, is also shown.
We’re still in a terminating, rising wedge, at the extremes.
We’re also at The Danger Point®, where the risk on a short position is least (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Pivot Lower
This week, biotech XBI, broke below support and then came back to test.
Today printed a new daily low (and closed lower), indicating the test may be complete.
Short trade: XBI-26-05, opened late in the session with a stop just above the day’s high (not advice not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Once Again, The Pattern Repeats
It’s been one (potentially) false breakout after another.
So far, we have Alcoa, Simon Property Group, and now, Five Below.
Before continuing, trade AA-26-03, Alcoa short. closed: Profit 2.51% (not advice, not a recommendation).
The expectation was for decisive downside; it wasn’t happening
Now, back to FIVE.
The longer-term chart shows what’s taking place in this market and the markets overall, is on a massive scale.
Five Below FIVE, Weekly
The zoom area has five weeks of tight congestion.
That was followed by an attempted upside breakout last week, which (so far) has failed.
The stop on short-trade FIVE-26-01, is set at just above Friday’s high, 239.52 (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Trading Channel
Today’s new daily low, indicates test of the up-thrust reversal (below), is complete.
During yesterday’s open, as the initial minutes pushed action higher, a short was opened (not advice, not a recommendation).
As Linda Rashke just got done telling us:
‘You need to have the market available (for your position) to take or provide your ‘inventory’
That means, selling out the longs or going short as the market is liquid or rising (not advice, not a recommendation).
Alcoa Corporation AA, Daily
Managing this trade, is watching the channel, maintaining position as long as price action dictates (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Repeating Pattern, Near Complete
There have been two short-position trades (not discussed on this site) in Cadence CDNS, so far this year.
Both were small losses.
After the last trade on March 5th, notes were made on the watch-list chart, to the effect:
‘Wait for the up-thrust’
Fast-forward to today.
If CDNS manages to finish the day above the close of March 4th (305.43), it would then be in up-thrust position (not advice, not a recommendation).
The chart shows the situation as of 11:45 a.m., EST
Cadence Design Systems CDNS, Daily Close
Note the ‘Ready’ indication.
That arrow corresponds to this link.
In my opinion, the comments on that post are nearly, if not more important, than the post itself.
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The Danger Point®, trade mark: No. 6,505,279
The Danger Point® 