Market Milestones: A Tale of Two Gappies

[Image] Happy Friday , The market has been pulling back over the last three weeks and even the strongest charts around like NVDA, MSFT, META, TSM and JPM faltered and stumbled slightly. There was only one chart that remained resolute and steadfast in its shear bullishness despite the onslaught of selling. That chart is none other than artificial intelligence internet giant GOOGL. While the markets sold off, GOOGL stood firm, scoffing at the bears and sneering at the short sellers. Thursday’s earnings solidified its position as the last chart standing among the mega cap tech companies. In the Thursday afternoon earnings, GOOGL initiated a quarterly dividend of 20 cents per share and announced a 70 billion-dollar buyback. It would have been cooler if the dividend was 25 cents per share for an even dollar a year, but whatever GOOGL, keep your money. GOOGL moved 16% in the hour following the earnings report and is sure to open with a massive gap into new all-time highs. The question that is most pertinent now is what kind of gap is this on GOOGL? GOOGL [Image]( [Image] Is this a NVDA circa May 25th, 2023 moment where the entire market will see a paradigm shift in how it sees AI and GOOGL’s place in the world? Or is this an exhaustion gap near the end of an epic bull run of over 100% from its October 2022 low? How the next few weeks play out will tell us a lot. If it is an exhaustion gap, the gap should fade, and then begin to plateau or fail. GOOGL had a dramatic exhaustion gap on [2/2/2022]( were the high of that days candle marked the all-time high for the next 729 days. One could even label the META gap on [2/2/24]( as an exhaustion gap considering the island reversal that just happened. NVDA [Image]( One could also label the META gap on [2/2/24]( as a type of exhaustion gap considering the island reversal that just happened. Some signs of an exhaustion gap are decreasing momentum, lower volume and bearish divergence. You can see that META had all of those after its February 2024 gap. While we are on the topic, check out the SNAP chart if you want to see a similar island reversal to META’s. I am not calling for a similar correction by any means, as SNAP and META are two entirely different companies, but even the most ardent Zuckerberg fan and META bull has to admit there are one or two similarities in those charts. The longer the META gap stays open, the more bearish the META chart is. GOOGL earnings will undoubtedly help out the META bulls, but if META breaks the low of Thursdays candle in the next two weeks, the bulls are going to need all the help they can get. META [Image]( SNAP [Image]( Below are two GOOGL charts that map out the breakaway and the exhaustion gap scenarios and their wave counts. If this is the middle of the 3rd wave and a breakaway gap, it could do something similar to NVDA in May 2023. However, if GOOGL is finishing up its 5th wave and this is an exhaustion gap, it could be on its last legs with a larger correction right around the corner. Whichever camp you ultimately end up in may unsurprisingly be determined by your view of the overall markets, the prevailing macro backdrop, and your chart analysis more broadly. GOOGL’s price action over the next few weeks should be very telling and very important. GOOGL BREAKAWAY [Image]( GOOGL EXHAUSTION [Image]( Strive On, Yates Craig, RLT Market Analyst [support@RLTNewsletter.com](mailto:support@rltnewsletter.com) Disclaimer: Trading involves inherent liabilities and risks. By accessing this newsletter, you acknowledge and understand the associated risks with trading and investing. This newsletter or email does not serve as a solicitation to buy or sell any security, and its content should not be construed as financial advice. The trades, analyses, and results presented are for entertainment and educational purposes only. These materials do not substitute professional advice from a qualified individual, firm, or corporation. Past performance does not guarantee future results, and simulated performance results have inherent limitations. Readers are strongly urged to consult a qualified financial advisor or professional before making any trading or investment decisions. Each individual's financial situation is unique, requiring personalized advice. No strategy or trading approach ensures profits, and market conditions can change rapidly. Participants should trade with capital they can afford to lose. This newsletter does not aim to create an advisor-client relationship, and receipt does not constitute such a relationship. Readers are responsible for compliance with applicable local laws and regulations related to trading and investing. The analysts and moderators may or may not trade any of the given equities. Unable to view? Read it [online]( If you no longer wish to receive mail from us, you can [unsubscribe]( Sent from: Real Life Trading in Nashville TN 37221