I will be speaking at the London Money Show on Friday and will not have a post Thursday and Friday. Normal service will be resumed on Saturday with my Weekly Wrap.
Yes, the ghost of the 1990s Dotcom boom (and bust) still stalks the stock markets as they enter their final ascent to their respective tops. The Twitter IPO is due this week and already, the company has raised its offer price from $17-$20 to $23-$25 due to the huge demand.
This Twittermania, of course, mirrors the extreme bullishness which has propelled the Nasdaq to such giddy heights on a heady mix of hope and hype. (Twitter will be trading on the NYSE, but the point stands).
And where are the earnings? Latest revenue was $168 Billion with net losses at $64 Billion.
Hmm. It really is deja vu all over again.
Here is the VIX – back to snooze mode.
I have been tracking this share for some time (see previous posts) and believe if the market is topping out around here, this would an excellent place to do it:
We have a clear A-B-C correction. a large neg mom div, and a rally to he Fibonacci 62% retrace.
The US banking sector is lagging many other sectors (esp tech) and in the UK, my bear target Barclays is breaking down:
The market is falling away rapidly from the long-term 258 support/resistance line I showed previously. It appears we could well be in a third wave down. If so, then watch out below!
I remain short Barclays.
Just in case you believe I am a bear on everything, I advised looking at going long Alcoa a few weeks ago. Recently, we have a huge rally out of the large two-year wedge base-building formation I pointed out then:
The gain has been around 20% and the omens are good for an initial measured rise to the $11 region. After that – a move to $14-$15 looks doable.
Incidentally, this is a classic case of Buy low. Sell high. This share traded over $50 at one time and has collapsed because of a glut of aluminium around the world.
And I did mention that because Alcoa is being booted out of the DJIA, that would likely be the signal to go long.
I remain long.