Market When Closed, Thursday 12 December
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Chips Ahoy?
by Alex King, CEO, Cestrian Capital Research, Inc
Well, I have been droning on about semiconductors being bullish for some time now, and the market has disagreed with me. We're about to find out who's right. Either I have to take my brickbats and hedge SOXL with SOXS and ride the wave down to make some gains, or $AVGO, which reported today and which is duly mooning, is going to drag the sector up. You can't trust a postmarket reaction so we shall have to see what is happening by tomorrow's close. For now I retain my bull call on the sector. If you see a renewed bout of enthusiasm in these quarters for the short-overhedge method then you will know how it worked out!
$AVGO's earnings reaction, by the way, proved the Indisputable Indomitable Power Of The Waves And Fibs. A beauty of a 1.618 Wave 3 extension hit smack bang to the dollar after the print. To quote the famous securities analyst Leroy Gibbs, I've heard of coincidences. Just never seen one.
Before we get to work, a word on the superb service that my colleague Yimin Xu is having a lot of fun running.
YX Insights. Where Grownups Go To Take Money From Degenerates.
Yimin Xu's YX Insights is a wonderful research service that we're delighted to host. I personally use his work a great deal in my own investing and trading. What I particularly like about YX Insights is that the service has helped me to make very good gains in stocks and ETFs on the fringes of the "Degenerate Economy" - specifically I am thinking of the BlackRock Bitcoin ETF, $IBIT, and of course the next-generation robotics and AI compute business $TSLA (nobody say "sedans"!). Yimin's work is purely technical in nature and pays no heed to the narrative of the day (which tends to be way too bullish or bearish for these kinds of names) nor to the somewhat lightweight fundamentals that underpin such stories. His work has given me the confidence to play highly speculative names in a risk-controlled way, with a series of successful gains banked and with risk controls always in place. I would encourage anyone who is both a grownup and interested in not missing out on "story stock" gains to take a look. I would expect Yimin to be no less successful in calling the downside of these stories when the inevitable rug pull comes.
Short- And Medium-Term Market Analysis
Don’t forget that to open full page versions of any of the charts below you can just click on the underlined header which titles each chart - they are all hyperlinks.