I Wonder if We've Just Seen AI's "New Paradigm Moment".
Updated
Like NVDA we can fit the various swings of the SMCI rally into Elliot wave and this would imply we're either already at the end of or close to the end of wave 5.
Might this have been the "New Paradigm" moment in AI? Could these final spikes be setting up the end of the rallies for the foreseeable future and the start of much larger corrections?
The case for it is good. Extreme over performance of late in these and with the recent legs up being very similar to those of final EW wave 5 spikes.
I think the most reasonable way to think of AI stocks now is like Nasdaq of the 1990s.
The question would be which year are we in? That makes a big difference.
If we were in 1996, we'd still be extremely early in the rally. Following breakouts would lead to even more exceptional upside.
If we're in 1999 - it's all about to come crashing down.
Given the confluence of sell signals the sensible thing to do is thing of the risk of the rug pull setups now.
Easy enough to rejoin the uptrend on a retest if it breaks out.
The potential upside moves and later massive mean reversion if AI stocks break out would be a really great opportunity.
However, as we stand right now I think it's best to be aware of the potential for a rug pull.
So many different things warn us of a potential rug pull.
Might this have been the "New Paradigm" moment in AI? Could these final spikes be setting up the end of the rallies for the foreseeable future and the start of much larger corrections?
The case for it is good. Extreme over performance of late in these and with the recent legs up being very similar to those of final EW wave 5 spikes.
I think the most reasonable way to think of AI stocks now is like Nasdaq of the 1990s.
The question would be which year are we in? That makes a big difference.
If we were in 1996, we'd still be extremely early in the rally. Following breakouts would lead to even more exceptional upside.
If we're in 1999 - it's all about to come crashing down.
Given the confluence of sell signals the sensible thing to do is thing of the risk of the rug pull setups now.
Easy enough to rejoin the uptrend on a retest if it breaks out.
The potential upside moves and later massive mean reversion if AI stocks break out would be a really great opportunity.
However, as we stand right now I think it's best to be aware of the potential for a rug pull.
So many different things warn us of a potential rug pull.
Note
SMCI 30% of the high since the proposed "New Paradigm" spike. Note
Things are developing. SMCI down close to 20% today.
Note
SMCI is at 400.
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