Have you got an exit strategy as US tech shares tumble?

TL;DR

The video analysis suggests that a bear market is beginning in high-tech shares, particularly in US companies like Tesla, due to a five-wave continuation pattern and a decline in wealth for retail traders.

Transcript

hello it's john burford with chart of the week for monday the 7th of september and i want to make the case today as i have for quite some time that we've reached the top of many high-tech shares the us ones in particular you know the well-known names um and we are starting a new bear market now this is tesla which has been the darling of teenage ro... Read More

Key Insights

• 👋 The five-wave continuation pattern in Tesla's chart suggests a high and the start of a bear market.
• 🌸 Retail traders, attracted to platforms like Robinhood, are experiencing losses as their options become worthless during the market decline.
• 📈 Wave analysis of the DOW and NASDAQ charts also indicates a potential bearish trend in the US indexes.
• 👋 The DOW has not reached a new all-time high, suggesting a truncation of the fifth wave and a bearish signal.
• 🤘 Companies like Apple, Amazon, Microsoft, and IBM are also showing signs of weakness and potential decline.
• 🖤 The analyst mocks the teenage traders using platforms like Robinhood, emphasizing their lack of sophistication.

Questions & Answers

Q: How did the pattern in Tesla's chart indicate a potential bear market?

The analyst points out a five-wave continuation pattern in Tesla's chart, which typically signals the end of a bull market and the start of a bear market. This pattern helped predict the recent high in the share price and the subsequent 30% decline.

Q: Why are retail traders facing significant losses?

Retail traders, particularly those using platforms like Robinhood, have been buying options heavily during the recent market rally. With the current decline, many of these options are now worthless, resulting in substantial losses for these traders.

Q: What evidence supports the claim of a bear market in high-tech shares?

The analyst highlights the wave analysis of the DOW and NASDAQ charts, showcasing potential tops and bearish signals. Additionally, the DOW has not reached a new all-time high, suggesting a potential truncation of the fifth wave, which is rare and bearish.

Q: What are some companies besides Tesla that are experiencing a decline?

Companies like Apple, Amazon, Microsoft, and IBM are also facing declines according to the analyst. They have been pushed up by retail traders but are now showing signs of weakness in their charts.

Summary & Key Takeaways

• The analysis indicates that Tesla, a popular high-tech share, has shown a five-wave continuation pattern, indicating a potential high and the start of a bear market.

• Retail traders, particularly inexperienced ones attracted to platforms like Robinhood, have pushed up the prices of tech shares, resulting in a significant decline in their wealth as the market drops.

• Additional evidence, such as the wave analysis of the DOW and NASDAQ charts, suggests that the overall US indexes have reached their tops and are likely to continue trending downward.