Facebook

The 'lunatic stocks' had better catch fire soon or the bull-market illusion is going to be in deep trouble.  I refer to the high-fliers as  'lunatic stocks' because they have the undying, conspiratorial support of buyers who make their living throwing other people's money at shares.  Now that the formerly uber-dependable CMG (Chipotle) is indisposed with food poisoning, and AAPL is busy doing designer wristwatch deals with the likes of Hermes, the lunatic group has dwindled in recent months to just a few leaders: AMZN, GOOG, MSFT, NFLX and FB, and even they are starting to sputter out, as the chart of Facebook, a key member of the group, shows (see inset).  FB has been head-butting a 107.75 Hidden Pivot midpoint since mid-November, to no avail. Had it succeeded in getting past this relatively modest resistance, the stock would have become an odds-on bet to reach 111.30, or possibly even 114.84. Considering that the stock is capable of rally $3-$5 in a single day, these targets are not very ambitious. And yet, bulls have been repelled by the midpoint pivot so many times in the last month that there is reason to doubt they can get past it.  Now, if they should fall beneath the point 'C' low of the pattern first, that would suggest not mere fatigue, but resignation and possible failure.  When a stock like Facebook is unable to forge boldly higher in the current stock-market environment, then no stock can. The company has a billion-and-a-half subscribers, with a database that the NSA can only envy. With that kind of "story," and Wall Street's sleaziest, most capable hucksters to hype the stock, FB could just as easily be  trading for $500 as for $100. Meanwhile, if FB is ready to roll over, it'll be Katie-bar-the-door time for the

Corporate news concerning Facebook has been plenty bullish lately, to say the least, yet all the stock could muster yesterday was a routine head-fake to an intraday high that was inconspicuous in the context of price action over the last three weeks.  However, although the rally failed to surpass the obvious peak at 63.91 recorded on April 2 (see inset), notice how it did exceed two others, fulfilling our criterion for an impulse leg on the daily chart.  Moreover, the fact that it did not exceed the 63.91 peak makes it a good prospect to generate the kind of 'camouflage' entry signal that we patiently look for. If it happens today or Monday in the way I've drawn, we'll look to the lower charts to get us aboard with a penny-ante stop-loss. _______ UPDATE (April 27, 11:30 p.m. ET): Friday's gap-down plunge significantly weakened the bullish implications of the recent rally top, although it would take a print below 55.44 to negate them. You can use 52.91 as a minimum downside target if the stock closes lower today (120-minute, A=66.19 on 3/25; B=55.44 on 4/7). ______ UPDATE (April 30, 11:31 p.m.): Bulls snatched victor from the jaws of defeat with a sharp rally off a 54.66 low that lay just 22 cents above the 'fail-safe' number given above. Having also exceeded a very well defined Hidden Pivot target at 59.60 yesterday, odds favor more upside -- presumably into the gap between 60.02 and 60.75 created last Friday on the way down. _______ UPDATE (May 1, 11:08 a.m.): Goosed by a powerful short-squeeze that began the day, the stock has blown past any target that could have been adduced from the lesser charts. Now, a print at 63.92 would deliver the haymaker to bears.

Facebook has just paid a whopping $18 billion for an instant-messaging application that evidently has caught on with the kids. The company, WhatsApp, has 55 employees, and its two founders are now billionaires. It would hardly surprise if their clerk-typist and janitor have become multimillionaires.  No one knows what kind of revenues the company has been generating because that's a secret. But they do not use an advertising model, and subscriptions are free for the first year, rising to $1 a year thereafter. Zuckerberg paid about $40 per for each of WhatsApp's 450 million users -- supposedly the going rate. Frankly, we view these valuations as absurd.  However, such concerns didn't stop Wall Street's OPM stewards from goosing FB sharply higher yesterday, pushing the stock well past a 67.43 Hidden Pivot target that we might have expected to contain FB for more than a few days.  Keep the number 75.82 in mind, because Hidden Pivot analysis says that's where this gas-bag will bump up against something solid. We'll be looking to short aggressively up there, so stay tuned to the chat room and to the tout updates if you're interested. _______ UPDATE (February 28, 2:50 a.m. EST): Yesterday's detour south could take the stock down to 67.66 if the intraday low, 68.85, gets taken out.  The target can be bottom-fished with a limit bid and a stop-loss as tight as 5 cents. ______ UPDATE: Friday's 67.38 low overshot my target by 28 cents, stopping out any bidders who played it by-the-book.  The overshoot of the target suggests that still-lower prices may impend. _______ UPDATE (March 10, 11:33 p.m.): Once past a midpoint resistance at 72.20, expect this stock to cruise to at least 74.93 (daily chart, A=66.51 on 3/3), the next Hidden Pivot resistance of significance. ______ UPDATE (March 17,

Facebook is falling hard after having failed by a whopping $3 to achieve a long-term rally target at 62.36. This is the most bearish price action we've seen in the stock in a long while, and if the selling were to continue without a significant upward correction this week, we could be looking at a fall to 47.82 over the near term.  That would equate to a 20% correction from the all-time high -- one that is probably long overdue.  Although the stock looks like a short from these levels, I'd be an aggressive buyer at the target, if only because there is always the possibility Facebook will stumble onto a new paradigm for monetizing all those eyeballs. Keep in mind that the data they are already gathering on subscribers is widely viewed as the best in the business -- valuable because it is enriched with detailed personal information supplied by users themselves. Personally, I find little value in Facebook and only rarely check my account. But others I know practically live on the site. It may be dying with young people, but there are still many hundreds of millions of subscribers left to be reached and marketed to. _______ UPDATE (10:03 a.m. EST): The crime syndicate whose turf includes this stock showed us who's boss this morning with a spectacular $9 short-squeeze to a so-far high of 62.30.  The (temporary) bad news  for them is that the rally has stalled just 0.06 from an important Hidden Pivot target at 62.36 (derived, quite clearly on the hourly chart, from these coordinates: A=36.02 (8/15); B=54.83 (1o/18); C=43.55 (11/26).

We haven't looked at this stock in a while, but the stall well shy of the 62.36 target is not a healthy sign. Even so, DaBoyz have yet to let the hot air out of this gas-bag.  Perhaps it's because, like the rest of us, They can't quite figure out whether a company with more than a billion subscribers is destined for greatness...or obsolescence. Facebook will be a speculative buy if it comes back down to the midpoint pivot at 52.96, but you'll need to do so using camouflage, since it would be the second time buyers have attempted a touch-and-go-landing from that price. ______ UPDATE (January 20, 5:30 p.m. EST): The bad news is that young users are reportedly deserting Facebook by the millions, bound for social networks such as Instagram and Snapchat.  The good news is that Facebook owns Instagram -- and that older people are signing up for Facebook in droves. On balance, it's hard to say what these new facts may hold for Facebook's future.

My outlook has been bearish, with a 45.29 downside target, notwithstanding a couple of short-covering eruptions along the way. I am now lowering the target to 43.83, however, on the basis of the chart shown. Your trading bias should be bearish until the target is reached, or very nearly reached, but if and when that occurs, you should reverse the position and get long with a stop-loss as tight as 0.20 cents. I'd suggest a good-till-canceled bid of 43.88, since it's possible the stock will turn without quite having reached our number.  If the order fills and survives the stop, tune to  the chat room or this page for further guidance.  _______ UPDATE (November 13, 8:33 p.m. EST): The stock has lost my interest and attention, so I'm taking it off the front page for a while.  One final note, however, that could prove useful to camouflage traders: At Wednesday's closing bell, it reversed the bearish polarity of the last three weeks with the bullish impulse leg shown (see inset, a fresh chart).  ________ UPDATE (November 26):  After taking its sweet old time reaching my 43.83 target, Facebook has taken a lunatic bounce this morning from within 23 cents of it, hitting a so far high of 46.08. If you loaded up near the low, please let me know in the chat room and I'll provide tracking guidance. Whatever you may have bought, half should have been exited by now for a partial gain.

Sometimes it seems like the only trick a trader need master to make money consistently is fading the opening.  That's when the shakedown artists do their magic, using market orders that have built up overnight to induce an artificial high or low that goes fleetingly against whatever mood is evident at the bell. And so it was yesterday with Facebook, which leaped a manic $2.67 after frightening the rubes with an equally crazed, 73-cent dive on the opening bar. This manipulation left my bearish target at 45.25 intact, and so it will remain unless DaBoyz can engineer a further rally surpassing 52.09.  As a practical matter, however, the stock is a bull trade at the moment, having ended yesterday's session on a minor entry signal at 49.92 that promises to deliver a minimum 50.57 provided the midpoint pivot at 50.13 can be surmounted. This is small stuff, even for night owls, but there could be a bigger payoff if you stay long and the rally segues into a full-blown short-squeeze Wednesday morning. _______ UPDATE (8:50 p.m. EST): The stock tanked nearly $2 after a bull-trap squeeze on the opening came within 12 cents of our rally target. The head-fake peak was particularly nasty because it created an ostensibly tradable impulse leg on the intraday charts that mutated within minutes into dross.  By day's end, this vehicle looked suitable only for scalpers with a long-term horizon of perhaps 30 minutes.

I no longer have a confident feel for whether Facebook's business model is good or bad. To the good, the user data that Facebook collects and sells to marketers is the best that money can buy, since it allows vendors to assemble profiles that reflect users' explicit preferences --sometimes, even, their innermost desires. From an ad-man's standpoint, this is infinitely better than having to guess customers' likes and dislikes on the basis of which web sites they have visited and links they have clicked on. But will users eventually abandon Facebook as the company's methods of extracting data become more invasive and insidious?  It's impossible to say at this point. Meanwhile, Facebook, Google and Microsoft are developing new business models that will eliminate cookies. Facebook will instead aggressively exploit the detailed information it is already collecting on users in new ways. For their part, Google and Microsoft will track users via unique ID codes that are embedded in each and every personal device: PCs, laptops, tablets and smart phones.  The firms will therefore be able to cut out the middle men who broker consumer data obtained from cookies, and to sell higher-quality consumer data directly to vendors.  This would allow the three firms to stake out dominant positions atop the advertising food-chain. However, it's possible users will revolt as they come to feel increasingly exploited, compromised and targeted by all-too-savvy marketing men. And that's why Facebook's future is so difficult to handicap. At the very least, the company would seem to be vulnerable to competition from social-network providers who, even if less profitable, are more mindful of privacy issues. From a purely technical standpoint, Facebook shares appear to have begun a correction that could last for at least a few more weeks. The stock has more than doubled in price

It warms the cockles to see the mindless herd respond with such enthusiasm to Facebook's announcement that it will make everyone's personal information available to virtually anyone in the world who wants or needs it, including those who don't subscribe, the Stasi, Triad assassins, Macy's, Julian Assange and your first wife.  As to how much higher this gas-bag is likely to waft before privacy concerns kill the golden goose, the Hidden Pivot target at 54.51 (see inset) is my best guess. There's a lesser pivot at 53.16 where we might look for a stall, but I'm suggesting holding out for more, and for shorting the stock if and when it kisses 54.51.  The blue line just beneath that target is an alert I've set to warn me with bells and whistles when the target is reached. Traders who play this stock should do the same. Officially, I'll recommend offering 400 shares short at 54.51, stop 54.67.  (Note: I'd suggested getting long until the target is reached during yesterday's impromptu trading session, but the stock could already be there by the time you read this.) _______ UPDATE (12:15 p.m. EDT): The little cow pie popped to 54.83 before doing what we'd expected it to do -- i.e., sink.  Officially we no longer hold a position and will record a $70 loss. However, I'm gratified to have heard from numerous subscribers who used a wider stop-loss and who are therefore still short. You're in at an opportune price, and I wish you good luck managing the position. I'll suggest diving for cover, though, if FB pokes even slightly above Friday's high. _______ UPDATE (October 21, 11:06 a.m. EDT):  Shorts can relax now that this hoax has failed to surpass Friday's high.  DaSleazeballs opened it on a bull-trap high that hit 54.81, but