Max Stonetrail said:
mazag08 said:
terminedeHey everyone,
If anyone sees any value in it, feel free to post some stocks with earnings coming up that you might be interested playing. I'll let you know if I'm seeing a wave setup that is primed for a spike in one direction or another. If not, no biggie.
Hi Mazag,
How about AMD? Earnings Tuesday 2/1.
This one is tough.
It's not overly complicated from an EW perspective. The waves actually line up well. I could do a long post going over everything that's happened since it began and where I think we are (I ended up doing this.. sorry not sorry). But it would take me all night.
Long story short.. stocks like AMD are tough because they go parabolic. From 2015 to 2018 it was in the $0 - $35 range. Then it had a runup to the high $50's followed by the COVID dip down to the mid $30's. Easy. Happens to the best of them. But then it decided to get serious with the rest of the mega chip stocks and the supply shortages. Next was $93, then $120 (Where I thought it had topped... go back and search, I was big time wrong) and ultimately $160ish. When you go from $35 to $160 in the same time that you went from $0 to $35, there isn't a Fibonacci tool in the world that can help you.
Or is there?
See, one thing I've learned over the last 3-6 months is that 5th waves seem to really like to be the ones that get extended. Let me explain..
We know that price travels upward in 5 wave increments during impulses. We know that odd numbered waves subdivide into 5 wave structures. We know that even numbered waves subdivide in 3 wave structures. Cool. Well... with something like AMD... we had a perfect Wave (1) up and Wave (2) correction back down. You can see below the subwaves that prove the structure out. Notice the timeframe. And remember my numbering system and how it subdivides...
Grand Super Cycle - (I),(II),(III),(IV),(V)
Super Cycle - I,II,III,IV,V
Primary - (1),(2),(3),(4),(5)
Intermediate - 1,2,3,4,5
Minor - (i),(ii),(iii),(iv),(v)
minute - i,ii,iii,iv,v
We have expectations based on Fibonacci extensions of where waves will go. I've posted the pinball charts numerous times.. go back a couple of days or maybe a week and you can find them.
Since odd numbered waves subdivide into 5-wave structures (most of the time, we wont talk about the ones that don't right now), we can expect a fifth wave to take the shape of a five-wave structure. So with that said, notice where (4) is on this chart, which signifies the bottom of Wave (4) and the beginning of Wave (5).
Up until this point.. AMD had gotten extended by about 2-1/2 fib counts (which extends every subsequent wave by that same amount). It's still within reason though. Until..
This 5th wave extended way above the fib levels that a 5th wave should have. But if you draw your Fibonacci extension to the top of wave 1 of the 5th wave, and then down to the bottom of wave 2 within the 5th wave, you will see that while the overall 5th wave extended, the Fibonacci math is still working within it's own 5-wave structure.
All of this to say.. I really really think $164.46 was the 5th wave ultimate top after being super extended and we are headed down. How far is yet to be determined. After a wave 5 tops, that top becomes the Wave 1 of the next degree up. So in this case, that top became the top of Wave I. We are now searching for II (If you're confused, scroll up and look at my wave labeling legend). 2nd waves retreat to between 38% and 61% usually. As of right now, we are near 38% (dark red). But my guess is that we are merely bottoming in the "a" wave of a larger a-b-c structure where a=down, b=back up, and c=5 waves down.
So earnings are in a week. My guess is we are bottoming in the "a" wave and that earnings will act as a catalyst to start the "b" wave spike. You can see here that we already have 5 waves down starting at the top of wave "b". This could end up being ALL of the correction (all of wave II), and we could be heading back up.. but it feels too shallow to me. I would expect that this action has merely been the a-b-c structure within the larger "a" wave and that there is a "b" wave to be expected up, though short of ATH, and then a 5-wave "c" wave structure down until we bottom in II at either the 50% or 61% retracement level. And since chips are still in shortage, I would definitely expect surprises to the upside. Make sure you keep that in mind.
TLDR.. pay very close attention through next week. If we haven't started back up yet, I would expect earnings to act as our "b" wave catalyst. If we have started back up, then it would depend on which wave we are in within the "b" wave to know what earnings might do. Sometimes earnings do nothing. I'll follow up a week from now.
Edit: Though the last month has vindicated my "we need more weakness because most every stock and index is too extended up!!!!!!!" mantra, I have noticed that my errors usually come when I make calls to the downside. So if you want to try and play AMD, maybe keep it in the back of your mind that..
1. This is still a bull market. Surprises come to the upside
2. Mazag08 is maybe 3 years into this and is at best a 5 out of 10 on the EW scale of perfectness.
3. AMD is in an industry experiencing shortages and high demand. Again.. surprises should be expected upward.
