Category Archives: Wyckoff

SOXX … Keeps on Slippin’

October 23, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-18, SOXX, TSM, Wyckoff Tags: , , , ,

Downward Pressure

Insiders have sold out; the train has left the station.

Big caps, NVDA, and TSM, appear to have reached (and reversed from) all-time highs, simultaneously but separately.

NVDA, with an Up-Thrust, TSM, with an exhaustion spike (not advice, not a recommendation).

Of course, anything can happen, there could be a reversal.

For now however, downward pressure appears to be increasing.

Taiwan Semi opened below yesterday’s low and Nvidia posted a new daily low within seconds after its open.

Let’s look at Nvidia and see how Fibonacci time sequences are affecting price action.

Nvidia NVDA, Daily

At this juncture, we’re in Wyckoff Up-Thrust condition (not advice, not a recommendation).

Price action posted above resistance (blue line) and retreated.

Note the ‘Week 89’, first discussed here, and here.

Then, we have yesterday’s action at both Fibonacci count 89 (minus two days) and 55 (plus one day).

Stay Tuned

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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

Taiwan Semi’s Exhaustion Spike

October 18, 2024 By in Artificial Intelligence, Semiconductors, SOXS, SOXS-24-18, SOXX, TSM, Wyckoff 2 Comments

‘… Giving It All She’s Got, Captain’

One hundred and fourteen years ago, Wyckoff described the ‘exhaustion spike’.

‘After long upward bull market, there’s a blow-off top on heavy volume’

That may be what happened yesterday with earnings from TSM.

The sector itself, the SOXX, is far below its all-time highs.

That implies the market’s ‘thinning-out’.

Right now, as of this post (11:32 a.m., EST), SOXX is trading in sort of a no man’s land.

Action is higher for the day, but in the lower end of the sharp down move from Tuesday, the 15th.

Semiconductors, SOXX, Daily

‘Lower Half’ action sets a bearish tone.

If we get a new daily low, that increases the probability of more downside (not advice, not a recommendation).

Stay Tuned

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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 ASML ‘Crash’

October 16, 2024 By in Artificial Intelligence, ASML, Semiconductors, SOXS, SOXS-24-18, SOXX, Wyckoff Tags: ,

It Really Is, A Crash

ASML down -21.8%, in just two days; the biggest downdraft in a quarter century.

A ‘premature’ earnings release was given as the excuse; like waiting one day longer was going to make the news better.

The important part, Wyckoff analysis techniques picked up on the SOXX index and highlighted ‘something’s up’.

Wyckoff Clues Ahead-of-Time

There was an aberration in volume (here), initially thought to be exhaustion.

Turns out, that concentrated volume was (potentially) preparation for the attempted breakout, link here.

Either way, the anomaly was identified and noted; resulting action was to position short; trade SOXS-24-18 (not advice, not a recommendation).

Market Stunned

Yesterday’s downdraft in the SOXX, was a -5%, loss.

Today, so far, shows a tight trading range in an attempt to test higher (as described here).

At this point, significantly higher, is not happening (not advice, not a recommendation).

Stay Tuned

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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

CarMax in The Lane

October 9, 2024 By in Interest Rates, KMX, Real Estate, Wyckoff

‘Stay in Your Lane’

As interest rates rachet higher, the squeeze is being put on operations that are rate dependent; real estate and auto loans to name just two (not advice, not a recommendation).

Tomorrow’s price action in CarMax, is likely to confirm the trend (shown below) or negate.

Note: We could also have a trading channel.

CarMax KMX, Daily

If KMX, is in the channel, we’re at the far-right end of the ‘supply side’.

It’s important to note, price action is also (just) below well-established support at the 73.50-area.

From a technical standpoint, that puts KMX, in Wyckoff ‘spring’ position.

The expectation is for the spring set-up to fail (not advice, not a recommendation).

Stay Tuned

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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

Bad News for Silver Bulls

October 8, 2024 By in Gold & Silver, SLV, Wyckoff Tags:

It’s Like A ‘Broken Dream’

For silver bulls, it must feel like the old Rod Stewart song, from the early 70’s, ‘In a Broken Dream’;

‘Right now, is where you are … in a broken dream’

Especially so, for those allowing themselves to be subjected to non-stop propaganda about a ‘hyperinflation breakout’ or that silver’s going to ‘close the gap’ with gold.

So, it’s been nearly six months … where is it?

Meanwhile, back at the ranch during those same six-months, the press and YouTube grifters et al., were ignored.

Analysis was fact based; what’s the market saying is the most likely thing to happen?

The last post, link here, said to watch out for a failed breakout (Wyckoff Up-Thrust).

Silver SLV, Weekly

SLV price action has posted a new weekly low; both MACD lines, and histogram, show bearish divergence.

Of course, anything can happen. Silver could move higher.

However, the chart says, at this point, probability for (significantly) higher action is low (not advice, not a recommendation).

Stay Tuned

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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

Real Estate Reversal

October 3, 2024 By in $SPSIBI, Biotech, DRV, DRV-24-05, Interest Rates, IYR, LABD, LABD-24-19, Real Estate, SPBIO, TLT, Wyckoff, XBI 1 Comment

Sudden Turn

Watch for failed moves.

When an apparent move fails, it tells you the other side’s exhausted.

That’s when the sharks move in.

It could be happening to IYR, right now; yesterday’s ‘reversal’ bar, has failed (not advice, not a recommendation).

The last update on the sector, link here gave a head’s up, a reversal appeared likely.

Now, we have more confirmation with the failed move shown below.

Real Estate IYR, Daily

Yesterday, IYR, had penetrated support (blue line) and was in Wyckoff ‘spring’ position.

That spring (set-up) has failed.

Now, it gets interesting.

Bonds (TLT) continue lower with rates continuing higher; the exact opposite of what the public thinks is ‘supposed’ to happen.

Positioning

Naturally, with the above conditions a short was opened DRV-24-05, with the stop at DRV’s session low @ 23.89 (not advice, not a recommendation).

Separately, the short on XBI (LABD-24-19) is not performing as expected. Today is lower but there’s no new daily low (as of 11:55 a.m., EST).

Position was exited with a loss of – 2.48%.

Stay Tuned

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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

Good News/Bad News … Micron

September 29, 2024 By in Artificial Intelligence, David Weis, MU, NVDA, Semiconductors, SOXS, SOXS-24-17, SOXX, Wyckoff Tags: , , , ,

Massive Volume & Gap

From a Wyckoff and David Weis analysis perspective, wide high-volume, price bars tend to be tested.

What does that tell us (to anticipate) with Micron’s huge gap-up with volume?

When we go to the chart, we see more … a lot more.

Frist off, let’s not forget, Micron’s Number Nine, in market cap within the SOXX, tracking ETF.

Its price action behavior (significantly) affects the index.

Micron Technology MU, Daily

We’ve got a (possible) Head & Shoulders. with an Up-Thrust, precipitated by good news (here and here).

It’s been 70 (trading) Days since Nvidia hit all-time highs; a high forecasted, then confirmed here and here:

Back then, was this:

“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).”

It was significant. Nvidia has not been there since.

Implications

The implication with the (still holding) Nvidia top, is the A.I. bubble has burst.

Possibly the largest asset bubble in world history.

What we’re seeing with Micron, is potentially the last gasps of short covering, with an attempt to mount a rally in an overall deflating market (not advice, not a recommendation).

Stay Tuned

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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, Fibonacci, & The Tape

September 24, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-18, Livermore, Loeb, SOXS, SOXS-24-16, SOXX, SPBIO, Wyckoff, XBI Tags: , , , ,

Reversal of Significance

Wyckoff (tape reading) analysis identified the potential reversal in XBI.

In the past two days of trading, biotech XBI, is decisively lower (not advice, not a recommendation).

However, there’s more to this story.

As we’ll see below, Fibonacci is at work as well.

Biotech XBI, Daily Close

From closing high on 2/27/24, to closing high on 9/19/24, was a Fibonacci 144 days (minus one).

Ladies and Gentlemen, it doesn’t get much better 🙂

The black lines show resistance penetration, up-thrust and reversal.

Livermore, Wyckoff & Loeb

The trading methods of the three market masters above, can be summarized as:

Strategy, Tactics and Focus.

Livermore’s method of ‘what’s going to happen in a (potential) big way’, pointed to biotech.

Wyckoff’s analysis was used to identify (to the day), the potential for a significant reversal.

Loeb, who is less known, was the former Vice Chairman of E.F. Hutton, disparaged ‘diversification’ as the ‘averaging of errors’; meaning, if you don’t know what you’re doing (in the markets), you ‘diversify.’

We can see all three at work in the selection to go short biotech via LABD (not advice, not a recommendation).

Fixing Errors

For those watching, you got to see up close and personal a trading error on shorting the SOXX; specifically, an -11.6%, hit, link here.

As of this post, four trading days later, that loss has been fully recovered and then some.

This is how should be done.

Clear the mind, look for (don’t force) another opportunity, get to back to business.

Stay Tuned

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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 (fake-out) Breakout

September 20, 2024 By in $SPSIBI, Biotech, Bonds, Federal Reserve, Interest Rates, LABD, LABD-24-18, SOXS-24-16, SPBIO, TLT, Wyckoff, XBI 1 Comment

That Didn’t Take Long

It was just four days ago, the mainstream (in this report) was telling us, be on the lookout for a biotech breakout.

That was then … here we are now.

Price action in XBI, attempted to break higher at the Fed announcement.

That move appeared to fail by the end of Wednesday’s session … then came Thursday’s launch higher.

However, that move may have failed as well.

Biotech XBI, Hourly

At this point, we’ve posted a Wyckoff Up-Trust (reversal).

If this is a significant reversal, we’re still in the very early stages; at The Danger Point®

Positioning

As can be seen in the sidebar, a short position was opened (yesterday), LABD-24-18.

That position has been increased in size during this session (not advice, not a recommendation).

The SOXX (short) Exit.

Yesterday, SOXS-24-16, was exited with an -11.6%, hit; so, everyone can see the effects of breaking one’s discipline (not respecting the position stop).

Don’t force the trade … sounds so simple.

Getting back to work, the XBI false breakout was recognized early and the trade opened.

Today, so far, we have follow-through, confirming the reversal.

Bonds Continue Lower

Bonds, TLT, are currently posting an outside-down (reversal) on the weekly timeframe.

The last time there was an outside-down on the weekly, was over two-years ago; week of August 5th, 2022.

After that, bonds declined a whopping 32% before (slightly) recovering.

Now, they’re posting outside-down … again.

Stay Tuned

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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

CarMax … At The Edge

September 15, 2024 By in ALLY, KMX, NVDA, Semiconductors, SOXX, Wyckoff, ZeroHedge

Wyckoff Masterclass

Just twelve days from now, CarMax (KMX) reports earnings.

With that, we already have the backdrop of auto loan implosions; the cratering of Ally Financial (ALLY), link here.

Everybody seems to be waiting for used car prices to decline; conditions may now be in place to support an auto sector markdown.

Price action of CarMax supports the idea that lower prices, at least for KMX, may be just ahead (not advice, not a recommendation).

CarMax KMX, Daily

Right now, and similar to semiconductors, KMX, is testing the underside of resistance.

Numerous Wyckoff characteristics are shown.

First, the up-thrust, with a test.

Then, a decline that includes a wide (modestly) high volume bar; now being tested, as well.

Price action at this juncture, is at a Fibonacci 38.2%, retrace of the entire move starting from the August 26th, high.

Bear Market Characteristics

As with Nvidia and the SOXX, KMX, is posting wide bars, huge gap moves.

In the six-months of price action shown above, KMX, has oscillated in a range that’s 35%, wide.

This is not bull-market behavior.

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