Market Rollercoaster

Semis Leading Down

BraVoCycles Newsletter
July 21, 2024

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I have been “treading the needle,” guiding premium subscribers to what I believe is a market top of significance, providing much more detail than is possible in the short free newsletter.

I will continue to guide them through the ups and downs of the bull and bear markets with unmatched precision using my multi-pronged approach, which comprises cycles, EWT, technical, and sentiment analysis.

Below are some “goodies” that are normally reserved for premium content.

DJI Top

DJI completed 5 waves up from the Oct’22 low and likely 5 waves of a higher degree from the 2009 low. In Elliott Wave Theory (EWT) terms, this implies a significant correction to come.
The last week's candle is referred to as a “Shooting Star” in Japanese candlestick patterns. It has strong bearish implications.
The thrust from a 4-th wave triangle is a terminal pattern per EWT → a reversal follows.
There was an overthrow over the blue trendline and upper trendline of the gray price channel, followed by a sharp reversal → a bearish reversal signal.
Supporting daily and weekly cycle analysis is presented in premium content.

SPX Top

DJI completed 5 waves up from the Oct’22 low and likely 5 waves of a higher degree from the 2009 low. In Elliott Wave Theory (EWT) terms, this implies a significant correction to come.
The last week's candle is referred to as a “Bearish Engulfing.” It has strong bearish implications.
There was an overthrow over the upper trendline gray wedge, followed by a sharp reversal → a bearish reversal signal.

SOX Update

I mentioned a few times how the semiconductor index (SOX), led by NVDA, is important for NDX and the overall market.
I pointed to negative divergences in RSI and MACD several days ago.
I believe I also pointed out the bearish engulfing pattern in the last update. SOX had pronounced bearish engulfing at March, June, and July highs. This has bearish implications.
Notably, SOX broke below the blue and red trendlines. This cannot be bullish.
SOX crossed below 10D EMA, indicating that a short-term trend is down.
SOX also crossed below 50D MA, indicating that a medium-term trend is down.
The next “stop” is 100D MA, but it will also break it on its way to the 40D cycle target at 50k+/-.
The target range overlaps support, and 200D MA may converge there as well.
The cycle analysis is presented in premium content.

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NFLX

NFLX is not in Magnificent 7 but also an important large-cap tech stock. Studying its chart is educational.
From the July 2021 top, NFLX made 5 waves down. After that, according to the Elliott Wave Theory (EWT), one should expect a corrective 3-wave bounce, then at least another 5 waves down.
Indeed, NFLX bounced with an A-B-C to almost 2021 high, to form (2) or (B), from which it reversed in the last couple of weeks.
Note negative divergences in RSI and MACD between the tops of waves ((iii)) and ((iv)). That signifies that a top of significance may be in place.
Note also the orange wedge. Below the wedge, NFLX may accelerate its slide.
The EW structural requirement suggests that NFLX should go at least below the level of (1)/(A), which is more than 75% down from the present level.

The NFLX’s weekly cycle composite rhymes with the EW count and the slide should continue into early 2025 and possibly beyond, TBD.

Follow BraVoCycles on X

Follow me on X (former Twitter) for timely market updates between the newsletters.
Last week, I posted hints/signals of a potential VIX reversal in the premium newsletter and more in real-time on X. Notably, I posted the weekly cycle composite of VIX a week ago on X. It caught the turn in VIX nicely (this degree of exactness does not always happen with weekly cycle composites, as they have larger tolerances).

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Market Summary

Market Data

As of close on 19 July, 2024.

What Has Been

What a week. We have likely seen reversals in major US indexes. Not unexpected. Semiconductors were leading down.
Dow declined 377.49 points or -0.93% to 40,287.53.
S&P 500 declined 39.59 points or -0.71% to 5,505.
Nasdaq declined 144.28 points or -0.81% to 17,726.94.
Russell 2000 declined 13.38 points or -0.61% to 2,184.91.
VIX and VXX were up strongly.
The major Asian markets had a mixed day, while European stock bourses were down.