Wednesday, June 27, 2012

Last September, with Netflix shares in the $170s, down from a hysteria-driven blowoff to $305, I offered a commentary under the headline Netflix Plummets, and for Good Reason.  With the stock trading 40% off its highs at the time, I didn't see much value in it. I still don't -- and that's with NFLX currently hovering in the mid-$60s. Recall that the company was perceived as the hottest new idea in the business world just a year ago. Now it is just another dot-com has-been, trying to sell streaming movies at a time when big competitors like Amazon and Comcast have begun giving them away.  Netflix is headed to zero, isn't it obvious? Perhaps there'll be a lesson in it for all of the miserable dolts who still believe that Facebook shares offer good value.  From a technical standpoint, Netflix stock could fall to minus $46. Since we know that's impossible, I've settled on zero to be more realistic. Click here to sample Rick's Picks detailed trading 'touts' and the  chat room free for a week.

July Silver continues to hang on for dear life, having come within a single penny of the watershed low at 26.500 recorded on the penultimate trading say of 2011. If and when it is breached -- and it appears to be only a matter of time before this occurs -- the 25.230 'D' target of the pattern shown would become an odds-on bet.

The futures were being manipulated lower in after-hours trading, creating a duel on the lesser charts but also depleting the ranks of sellers in order to set up a potential short squeeze. Bulls hold a small edge at the moment, but it's not enough to offer a compelling trade, even one initiated with camouflage. Although a 1296.00 downside target noted here earlier remains valid in theory, it has been too long in coming to be worth much.  Looking at a bigger picture, as noted here earlier, a decisive penetration of that support would likely consign the futures to a test of support near 1260, where the E-Mini S&P made a technically significant low in early June.

Fires have erupted much closer to home this afternoon, whipped by gusts that scattered porch furniture onto the yard. Our neighborhood is all but unburnable because the public spaces are mostly ponds, shrubs and some strategically placed shade trees but no forests.  Unfortunately, many friends live in nearby canyons where fires seem to be everywhere. I will post touts for Wednesday later tonight, after I've checked in with the local volunteer corps.

So engrossed were we in dissing Facebook’s IPO that we almost failed to notice that the stock had recouped nearly 40 percent of the losses it suffered after mid-May’s abortive IPO.  FB opened that day at $42 and shot up to $45 momentarily before embarking on a three-week dirge down to 25.52.  That low was hit on June 6, but the shares have since perked up a tad, hitting a recovery high of 33.45 last week.  On Wall Street, where too much of a bad thing can hold perverse enticement for opportunity-starved investors, perhaps all that was needed to attract a new wave of buyers was a little bad publicity. That, the company has gottern in spades.  First came the fallout from the IPO itself.  Investors are claiming $500 million in losses caused by glitches in Nasdaq’s order system. Some who bought the stock that day may wish they hadn’t, but it’ll be interesting to see whether the size of their claims shrinks or grows as Facebook creeps back toward its IPO price, as seems possible. Other, recent news stories have reflected poorly on Facebook’s business model, which entails gathering as much intelligence as it can on 900 million users and selling said data to advertisers. Nothing wrong with that, of course -- asssuming that the fact-gathering is on the up-and-up and the information is not abused. Unfortunately, Facebook has flunked on both counts, and badly. A couple of weeks ago, there was the widely circulated story about a web surfer, Nick Bergus, who stumbled on a 55-gallon vat of sexual lubricant for sale on Amazon.  Bergus posted a link to the item’s Amazon Facebook page and jokingly inserted the caption: “For Valentine’s Day. And every day. For the rest of your life.”  Amazon took Bergus’s “endorsement” and ran with