Tag Archives: FB

Quick Amazon Stock Chart Review

When you see someone try to wave count Facebook in great detail, then  you will find someone with too much time on their hands.  I try to stay away from all single stock wave counts, but it’s nice to record a potential wave 3 top in Cycle degree. FB is done for, as far as I’m concerned,  as the age of the internet is in an, s curve plateau. Two trend lines can give us a clue how deep FB can crash in the impending Cycle degree bear market.  The standard correction for a big bear market could be a 70-80% retracement.

It’s the top trend line that is important as that shows a long steady climb. That top line is duplicated in parallel fashion and then dragged down to the bottom.  This points to the $100 price level.  Face Book is in such a bubble that it may burst and never rise again. FB will become an electronic burial ground for all the dying boomers as deleting your own account after you die is very hard todo.  Dead people do not pay  ad revenues the last time I checked, unless you become an AI vertual robot and live on forever.

Folks, we are coming into a time where all asset classes are going to have convulsions so large that “Buy&Hold” will no longer work for the next three years. There is a time to buy and there is a time to run to the hills and hunker down. Wait out the financial storm that will hit us, as this planet will be forced to de-leverage.

To show how expensive FB is to gold I have calculation when it was cheap at 100:1. Yes, with one ounce of gold you could buy 100 shares back in 2012. Now you can only buy 6.44 shares with one ounce of gold. This is the most extreme Gold/FB ratio I have ever recorded, and blows all previous cheap ratios out of the water.

As you can guess, I’m very bearish on the markets and FB is just another elephant in a china shop.  The Buy&Hold strategy is dead, for the next 3 years as even “value” investors are having a hard time in finding “value”.  Being bullish in the biggest bull market in history puts you inside the bubble. Bubble players don’t think they are in a bubble, so they will go down once the markets hit another iceberg.

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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. 

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