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Category Archives: INDICES

Facebook Record High Bubble Review

I just couldn’t resist looking at Facebook’s stock pattern. Just like many others they all seemed to be in bubble territory. If we jump back in time to the 2012 bottom and start to look up the wave structure, we see the pattern of an impulse. Well, it may start out like that, but it falls apart rather quickly at about $50. 

I look at it as a diagonal wave structure where the first wave was a zigzag. The higher the stock price travelled the uglier the patterns became. The chances are extremely high that Facebook had a diagonal 5th wave bull market ending at a potential wave 3 in Cycle degree.  The bottom of 2011 was the start of the stock mania in the general markets, with FB following about a year or so later. 

I show a huge gap at about the $25 price level. This gap only shows up when I set my frequency at Bigcharts to a daily setting. Once I switch the same chart to a weekly frequency, then the gaps miraculously disappear. Seeing and taking note of gaps is very important from my perspective. They say that 90% of all gaps eventually get closed… I would be the last guy to argue that point.

It may seem unbelievable at first, but you have to remember that we could be heading into what will be called a bear market. I have to call it a Cycle degree 4th wave correction and it is just part of a much bigger bull market yet to come. (After 2021)

Some single stocks may never regain their former glory after a high degree bear market, as some may just simply disappear. 

The Gold/FB ratio is now the most expensive since I have been keeping records. I don’t have that many records, but enough  to have some target ratios we can use.  This ratio stands at 7.52:1,  which means you can only buy 7.52 shares with one ounce of gold. At its low point you could buy 100 shares with one ounce of gold. This is a pretty extreme shift, and not until this ratio has started to shift back to bigger numbers, and we hear news of insider buying, then FB will remain extremely risky. 

Tesla 10 Day Chart Gap Review

On some settings gaps do not show themselves, but they do show up with this 10 day 5 minute chart. That gap that opened up is destined to get closed off again, and I’m pretty sure we will not have very long to wait before that happens. 

I have created a new category called “Single Stocks”  and this TSLA will be the first chart in this category. I will try and edit a few more single stock postings to add to this new category. 

Mini DJIA Intraday Crash Update

The Mini DJIA dropped like a rock on Thursday, trashing a few of my wave counts in both directions. For every one wave count that gets trashed two more alternates can pop up, showing us another potential direction that this market can still go. 

The speed and the angle of this crash sure fits a “C” wave very well.  The entire rally up to the peak was also a diagonal, and the following correction can work as a zigzag, containing an expanded flat inside the 3 wave counter rally. The whole pattern has a flat top and a steep bottom angle which touch at 3 points. This is one of those times that parallel lines are not required.

As it sits right now, and after a 3 wave crash, this market can blast to new record highs about as fast as it came down. Well, maybe not quite as fast, but technically the DOW should break to a new record high just one more time. I would expect another zigzag type of a move, and all it needs to do is break higher, by the slimmest of margins.

Of course it can drop like a rock and keep right on heading south as well, but if that is going to happen, it should do it sooner than later.

For a bigger bearish market to take hold, the DJIA has to decline much further before it can no longer recover. To put it bluntly, this 2017 top has been much harder to count out than the other two peaks in 2000 and 2007. I think it is due more to the fact that we are at a Cycle degree top, which makes the other peaks in our past, sequentially lower in degrees and more sensitive. 

You have to remember that the wave 3 peak in mid June, is the tallest peak in all of recorded stock market history, including old British market history as well.  It still amazes me that we are counting little bitty wave patterns at record peaks, trying to figure out when it’s going to get serious with the next set of impending corrections. 

From my Cycle degree perspective, finding a potential 4th wave is important to me as they help to give us a location. They also contain a warning that the next bullish phase will come to an end, followed by a much bigger correction. 

DJIA E-Mini Intraday Update

 

 

The markets are slowly grinding down in a South Easterly direction. These choppy declines can produce surprise counter rallies where the majority thinks they are going on the next leg up in stocks. When you look at this with a weekly chart, it has barely moved, so it justifies scraping the bottom of the degree list.   I moved the Micro degree down which gave us room for the first set of waves in Submicro degree, still keeping the smallest degree at the Miniscule level. 

I have a one diagonal decline, and due to space limitations I counted it as an impulse. In reality, it’s just another diagonal wave structure. So far in this decline I kept it within 3 degree levels, and the time will come when I have to add 3 more degree levels.  For this stock bubble to have burst, it has to continue its choppy gyrations. It will be a challenge to get close as we really don’t know if we are going to get a flat or a zigzag in Cycle degree.  I favor the flat, but I’m sure the markets will throw something else at us, just to confuse the best wave analyst professionals.  

Wave analysts act like a herd as well,  as it is pretty easy to see all the micro, mini, mini and other wave counts, being counted at the atomic degree level. This is useless wave counting,  if we don’t have a clue what the largest degree may be.  My goal has always been to look for and to confirm the highest realistic degree.  This degree is Cycle degree,  as I spent well over a decade chasing SC and GSC degree.  Many times I have already given descriptions of exactly the wave positions we need to correct the three largest degree levels, many are drawn out as idealized charts and templates. 

Short term we are still seeing a bit of a rally in the markets, but it should eventually trend lower.