A Reset or Correction

As a falling knife slices through 401k balances.

So, while the tech run has us sitting on pins and AI chips, tell us already! Was the downdraft from the high of October 29th a temporary setback? A “reset” as it were. Or worse?

That is, before we go back to more “going up on air” on lofty valuations and uncertainty.

Uncertainty because, we’re a whole decade early, before hundreds of billions CAPEX proves greater productivity. (I’ve seen overheated innovative promise before, pushing up market prices on pure air, but this is uhh….“Wow!”)

“Oh, but we have AI cash flows. “

Uhh, no. The CHIP MAKERS have cash flows. WE users have only a promise with an uncertain ETA somewhere. And a hatchet job to a host of entry level jobs. A lot of efficiently produced supply.

That’s why the market uncertainty. But for all this froth and frills? We’re assured some sort of new economic boom… albeit on evaporated employment? A strange brand of success. But that’s me.

“Why so cynical?”

If the AI bet fails, the economy crashes. If the AI bet succeeds, the economy crashes.

And recovers on what? Efficiency? With an estimated 25% hatchet job to entry-level employment…exactly WHO will comprise DEMAND? Who will turn around and buy or consume this efficiently produced SUPPLY? But surely somebody wins!

Who Wins?

Meet Gemini, Google’s AI assistant. It’s a suite of generative AI models created by Google to power a range of different digital products and services.

But here’s the rub, it beats the ever-living-snot out of Nvidia’s chip on graphics and almost every other metric as Nvidia’s stock slips.

“So, Nvidia slipped.”

Holding hundreds of billions capital investment? This was more than an Nvidia slip. It’s indicative.

The AI trade has completed Wave 5 of its uptrend followed by a punch to the gut FIVE-day gap-away “island”. The technical island was October 27-November 3, which has our customary “RESET” for more goin’ up on air looking more like an Exhaustion Gap which has a dance step of longer term permanence.

Thus far, we’re at least through Wave A and into Wave B which appears to be a customary “check” to the underside of the Daily chart’s Moving Average, before the start of Corrective Wave C.

We’ll keep an eye out for structural cues.