FSLR: Light Travels in Waves

Eight minutes out.

That is how far the sun sits from us, measured in light. Light covers 186,000 miles every second and nothing gets here faster, yet the trip still takes a little over eight minutes. Whatever is lighting up your morning left the sun before you ever saw it.

A headline works about the same way. It shines on the screen and we take it for the event, but that light left minutes, hours, or even days before, out of the crowd’s sentiment. The screen is only where it landed.

This week it landed as an election result. First Solar (FSLR) jumped roughly 9% in early trading on Wednesday after Democrats won control of both chambers of Congress, and the explanation was everywhere by the open. The low on the chart had already printed at the open on Monday, October 26 at $165.68. First Solar reported earnings later that week. But the biggest move came Wednesday, November 4, at the open. 

A Rock or a Bear

We had been tracking the sector for some time, looking for confirmation of a low. On October 29, hours before First Solar reported earnings, Zac Mannes posted this to our members: “Nothing confirming a reliable bottom yet for the wider yellow (B). Also it needs to be the WXY. It is holding the 61.8% though.”

Notice he did not call the bottom. The setup was there for a low, but until there was evidence of one, further downside was plausible.

We may see something off in the distance, and until there is sufficient light we can’t clearly identify what it is. Is that a big rock or a bear? I just can’t tell yet. It’s a shape of something. The light shines brighter and there it is. On October 29, FSLR holding that level was a shape in the distance. A rock would be a floor. A bear would mean lower.

With or Without Headlines

This may have bounced regardless of the news. I can’t prove that in this specific instance, and neither can anyone crediting the election. What the chart can show is the order of events: the low, then the headline. Read the election however you like. The new Congress has not been seated and no bill has moved, so this week’s jump is a crowd reacting to a feeling.

Even if one had the headlines ahead of time, you’re not always guaranteed to get the crowd’s reaction right. Russia invaded Ukraine on February 24, 2022. Hand that headline to most traders the night before and I can guess what they would have sold. The S&P 500 did drop at the open, only to finish up 1.5% for the day. By late March, it had closed about 8% higher still. 

Sentiment is at work, with or without headlines.

Light Travels in Waves

Light travels in waves, and so does the crowd’s mood, which is what Elliott Wave analysis reads via the structure of price. (The physicists will remind me that light also behaves as particles. Fair enough. Particles don’t chart as well.)

We are treating the decline from the June high near $321 as a correction inside a larger advance, one that may have ended near that $165.68 level. For as long as the last low holds, we will track the white path toward the $495.93 to $565.94 region over a span of years. If it fails, the yellow (B) near $144.30 comes next, then the orange 4 near $107.41.

The bullish setup says that price should now form the initial 1-2 up of Intermediate C of Primary 5. Put plainly, that would be a first rally and pullback to start the larger advance, and enough light to see what that shape is.

First Solar’s management trimmed 2026 sales guidance to $4.6 billion to $4.9 billion, expects better pricing and terms on the supply it has available from 2028 on, and says nearly 80% of its module footprint will be in the U.S. by 2027. The open risks are slower bookings and a warranty suit from developer Swift Current Energy.

One stock can always be its own story, so we check the sector. The Invesco Solar ETF (TAN) also had a solid setup for a potential low right at the .618 retrace, $38.65 on the daily chart below. That is the same retrace FSLR held, this time on a basket of global solar names. Each chart on its own, and both before the election.

Canadian Solar (CSIQ) gets an honorable mention. It is a secondary stock in the sector, and TAN and FSLR seem to have the more concrete setups. If the light keeps spreading, CSIQ likely catches it as well. 

Eight minutes out, nobody on earth knows the light is coming.

Light has just flashed forth from the crowd. It’s beginning to reach others. Now, is it just a flash, or the start of a new day? The waves will tell us.