FACEBOOK IS THE NEXT YAHOO AND THAT MAKES IT VERY BULLISH
In the chart below you will see a comparison between the YHOO IPO in its first 53 days and the FB IPO 53 days in. If the similarities in price movement weren't enough, I present you with this article from the day of the IPO that tells of YHOO hitting a high of 43 on that day before closing at 33. FB, as we know, hit a high of 45 on the day of its ipo. Here is the article from 1996 http://news.cnet.com/2100-1033-209413.html Also notice in the article how comparisons are made to other struggling IPOs in the internet space, such as Lycos and Excite. Very similar to the general dismal feeling surrounding social media stocks. Just as the internet was several years old then, social media today is an industry that is only several years old. The similarities go on and on. I wish I had access to article from a few months after the YHOO IPO showing how dismal the sentiment had become towards it. Unfortunately, I haven't been able to locate them. The sentiment is surely similar to what we are experiencing with FB currently. Here is the chart showing the price comparison: click chart to...
THE DROP IN AAPL TODAY DID NOTHING TO DIMINISH THE FAVORABLE TECHNICAL PICTURE
click chart to enlarge
HERE ARE THE TWO CHARTS THAT CONCERN ME THE MOST RIGHT NOW
I pointed out the chart of the Dow during the weekend review on Sunday. Today we had two more important technical events that I didn't want to see as a market participant that is 75% long here. click chart to...
AMONG THE CASUALTIES OF THE MARKET: SENTIMENT
There are times sentiment studies can be the most valuable tool one can have in their arsenal. There are also times to dump it in a toilet filled with old cigarette butts and clipped toenails. What separates the professional from the amateur is knowing when to use what. There are times to pull out your AK-47 during a battle and there are other times when it is better to use a hunting knife. WHEN matters. I haven't talked about sentiment for awhile because it is useless in a market that is caught in the mid-range of its bullish life cycle. It only becomes useful at extremes of one sort or another. Those extremes may involve highly oversold conditions, based on panic driven selling. Highly overbought conditions, based on pure greed. A break of an important generational trajectory point. A break of round number or important support level. We are now entering a moment in time when I am watching sentiment again. I'll tell you why: Something curious is happening during this recent selling that I just started paying attention to today. There seems to be a general lack of fear that has developed. While the Russell 2000, as one example, is sitting at one month lows, a short-term measure of the put/call ratio I track is sitting at near 3 month lows (see chart below). I am starting to pay attention now because of the following bearish technical events that have taken place over the past several trading days: 1. Dow failed the important generational trajectory for a third time on Friday. Death comes in 3s and 4s for bull markets. I said in the weekend review to "remain vigilant." 2. The Russell broke down and away from its generational trajectory as of the close today. 3. The VIX experienced a powerful breakout above its trajectory off the 2008 highs today. In the meantime, the chart below shows sentiment is actually becoming more bullish as these important trajectory points are broken: click chart to...
A SPECIAL MID-WEEK LOOK AT 3 INDICES THAT ARE CREATING CLARITY GOING FORWARD
I typically like to hold off on publishing technical assessments until the end of the week report. However, we are at a point in time and price here that it warrants special attention. These are the three indices that are driving market action here. Two of them (Dow and SOX) are sitting above technical levels of the utmost importance. The other (CRB) is providing fuel for the markets to move up further. Here's a look: click chart to...
5 CHARTS THAT TYPIFY SUMMER TRADING AND WHAT THEY MEAN GOING FORWARD
click chart to enlarge
AN ALTERNATIVE VIEW OF SYNC
SYNC is a mind-fuck. At least for me it has turned into one. What I mean by that is the stock has the potential to interrupt my mental equilibrium if I reinvest, regardless of how bullish I feel. When I begin changing my mind, jumping around or becoming squirrely about a stock I know it is time to walk away. More harm than good can occur if I continue hanging around. What I can still do, however, is dissect the price action so at least some of you who aren't afflicted with my handicaps can prosper. I have no position here as of Tuesday. Nevertheless, here is my assessment of price action alone. I feel the stock has settled enough to be able to weigh it out rationally. Here goes: click chart to...