Breaking down the stage of SMCI pop (with real time forecasts). SMCI has now completed all the general stages of the Minsky bubble. It made the rally, it made the top, it made the capitulation and then it made the mean reversion.
Big win for the efficacy of the Minsky model.
Let's now run through the stages as they happened. Because after the fact, it's easy. Everyone sees it. To benefit from a bull market you need to know how to take profit at the right time - let's review the clues we had.
SMCI had its "New Paradigm" moment in mid 2024. Original full post below.
At that point we had all the classic tells of a top forming. But if you trade market tops a lot, you know there's can be a some gaming going on before it actually ends.
Most often what we see is there being a bluff sell off and then a spike of the high. This provide a lot of liquidity for Mr Big to sell into Mr Little because My Little is either hitting stops above the high or FOMOing into the "New breakout" because they seen the previous versions pop 20 - 50% and they're not about to miss this one!!!
Getting the general zone on this one was easy. The market essentially topped on the 4.23. If we discount the spike outs.
And I've written super in depth posts about how most major inflection points in markets come from 4.23's. Since my time writing these posts/models for 4.23 reversals I've also dug into testing my fib based ideas against historic markets via different AI tools and actually found AI when given the test criteria will also define 4.23's as being related to speculative bubbles.
Like I said above, usually we fake crash, spike out and then real crash. So after we hit the first section of the move we went long into the low. Because even in a stronger drop we typically see the 76 bull trap here.
And then in classic form, we topped on the butterfly. Absolutely textbook.
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I'll now leave you with a series of NVDA charts.
4.23:
Butterfly:
And all of this is happening inside the zone I flagged up as the trend completion area for NVDA when it was trading under 500.
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What's the difference between SMCI and NVDA?
Maybe about 6 months.
