I have no love for anything related to Facebook even though the majority have been pushing the stock higher. FB has now started to back off in price gains as the problems with FB are too many to address.
If it wasn’t for all the GAPs in the FB chart I would not post anything, but this chart looks like Swiss Cheese with any GAP always having a 90% chance of getting filled. The July 2018 GAP might never get closed no matter how much the Facebook bulls wish for it to happen.
In November/December 2018 we had a small double bottom followed by a big bounce that may all be just a big bear market rally. In order for this 2019 rally to be part of a bear market rally then eventually, FB has to crash below the 2018 low at the $123 price level.
I don’t have much of a Gold/FB ratio database set up but today we are sitting at about 6.84:1.
Just in case FB investors don’t know, but Facebook is doomed just like all other Nasdaq related stocks. Facebook is running out of people as even the younger crowd is bored with it. After all how many cat and dog tricks are there? This rally that could be just finishing is just another bearish rally, but a small one to boot. If such a small counter rally can get the FB bulls all excited again, then they are pretty easy to fool on any counter rally of larger degree levels. Still, even if I had the available cash I personally would not short FB, Apple or any other popular stock, that many are also trying to short. TSLA also has an open gap, below present prices.
Elon Musk thinks he is bigger than the entire market, as he is constantly fighting the TSLA bears with his own stock purchases.
What you see all happened close to the end of the day. This flash crash will not show up until when trading begins. FB crashed all the way down to just below $195 and then soared right back up to the 217.50 close this Wednesday. This was strictly computer generated as no human can react this fast. If there were humans invoved then it would be choppy as hell, or we can actually see some waves. I will add to this in the next few days, but my last top posting was on June 30, 2018 when FB was about $200. FB traveled an additional $18 before this sudden flash crash happened. At a bull market top this is not a good sign as billions of investor money also when up in smoke like Mark Zugerburg’s $16.8 billion did. Investors are going to start thinking twice if this stock is worth holding.
This is another reason why I trade and don’t invest, because the smart traders that had puts out on FB turned out to be big winners!
Continue reading “Mark Zuckerberg’s Flash Crash And $16.8 Billion Wipe out”
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.