Tag Archives: FB

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.