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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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
End of The Test?
All eyes seem to be on reports like this, as if it’s a good thing while the nerdy kid in the back, is frantically waving, trying to get everyone’s attention.
All you need to know, link above, is in the first 55-seconds.
‘There’s never been a run like this’
It’s ok, this rally has legs because we’re believing the misconception, earnings move prices … so, all is well (not advice, not a recommendation).
Meanwhile, Back at The Bank
‘Ox Talks‘ has been relentlessly covering the truth; that truth is, the A.I. (and credit) narrative is imploding in real time (not advice, not a recommendation).
Which brings us to the banks.
The chart of Regional Banking ETF, KRE, shows what might be happening.
S&P Regional Banking ETF, KRE, Weekly
The Interpretation:
Wyckoff up-thrust in February, followed by ‘sign of supply’ in March, then up for a test.
We’re on a weekly timeframe; whatever happens has the potential for some duration.
With the breakdown, the test appears to be complete (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Fibonacci Retrace
The up-thrust reversal shown at left (black arrow), is at both a Fibonacci 50% retrace as well as 38.2%, on a longer time frame.
‘Normal’ market behavior is to come back for a test (not advice, not a recommendation).
If that happnes, we’ll cover more detail at the next session.
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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
Textbook
With a short-entry signal that’s straight out of David Weis’ training video (recorded in 2007), Alcoa breaks down in dramatic fashion (not advice, not a recommendation).
As of this post, 11:34 a.m., EST, Alcoa has gap-opened lower, currently down, -5.10%.
Alcoa AA, Daily
Prior short, AA-26-03, was exited last Friday with profit.
That action proved to be correct. The next session (yesterday), was a rally into a test.
Today, was a gap-lower open.
There’s a potential for a sustained move. Short, AA-26-04, opened with a stop located at yesterday’s high (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
The Danger Point® 