On April 6, while many investors were wondering if the AI stock rally had run its course, subscribers to Trader’s Classroom saw veteran Elliott wave instructor Tony Carrion examine the same question..
Looking at the wave structure in the Semiconductor ETF (SMH), Nvidia and Broadcom, Tony argued the declines appeared corrective — more consistent with fourth-wave behavior than the start of a major bear market. His conclusion: higher highs were still likely ahead.
Here are the charts he presented and what he said:
Semiconductor ETF (SMH):
“The question right now is whether or not all the five waves are in place for us to consider this bull market has peaked. So, to me it hasn’t... That the correction that we’ve been getting over the past few months is what looks to me to be fourth-wave price action.“
Nvidia (NVDA):
“On the basis of the wave patterns that have unfolded since the all-time high, it suggests that probably the highs have not been made, that this would be more consistent with the idea of a fourth-wave retracement.
… the Wave Principle is suggesting that probably the bull market in NVDA is not finished.”
Broadcom (AVGO):
“This also suggests a fourth-wave correction… what tells us that? This is the price action coming down from the all-time high. There are no five-wave patterns in here.”
At the end of his lesson, he said this to subscribers:
“To sum up quickly, I think the wave patterns are saying there should probably be one more run to chase the all-time high.”
What Happened Next?
Since that April 6 lesson:
SMH rallied roughly 30%.
NVIDIA rallied roughly 23%.
Broadcom rallied roughly 38%.
They all have recently hit new all-time highs…
Why This Matters
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