timwest
Short

Facebook FB Daily Chart MIRRORS the 1987 Stock Market Crash

NASDAQ:FB   FACEBOOK INC
1113 35 6
Fascinating comparison: I'll publish the 1987             Stock Market Crash Next so you can see how similar they are. I thought I would get this out before I figure out the perfect way to publish it.

I have a way with remembering chart patterns, and I especially remember this one.
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iggi8899
2 years ago
Is your chart implying a sell at this point, even after that sell off ?
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timwest PRO iggi8899
2 years ago
Take a look at the next chart I posted....
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iggi8899 timwest
2 years ago
Here's a tactical view of how your strategy may play out. Look for a break of lower channel.
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timwest PRO iggi8899
2 years ago
Agree
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iggi8899 timwest
2 years ago
Add a longer view.
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iggi8899 iggi8899
2 years ago
Thats a general view and its still a rough work. Slight width changes to those channels may even show the break already out of those channels. I think that lower channel may be a bit higher if you look back to the past. Small angle changes and width adjustments may need tweaking.
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iggi8899 iggi8899
2 years ago
Re adjusted again. Just a point of view.
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iggi8899 iggi8899
2 years ago
More divisions. This chart is much clearer. CNBC pumping FB and it still seems in a channel that shows validation. Be careful.
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godoftrading
2 years ago
Dont get how u can even compare the two... Unless u only going off pattern similarity...
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timwest PRO godoftrading
2 years ago
? godoftrading, I am comparing them by the overall pattern and the structure of the rally and the consolidations and breakouts, retests and the hype or extremes of Facebook's valuation (at the high) is a once in a generation or perhaps a once in a lifetime experience, sometimes only understood in hindsight.

I think the patterns are extremely similar and I'm showing my raw research. Sometimes people post comparisons of markets to other bubble markets and try to make a pattern fit. I remember chart patterns and thought this was useful, if not purely entertaining. The way to trade this pattern would be based on solid trading principles. And since I like to sell on new lows, my way of trading it would be to sell on weakness under the most recent daily lows.
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godoftrading timwest
2 years ago
Are u taking a short position in FB?
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timwest PRO godoftrading
2 years ago
I will when I think the time is right. Just after this big announcement of their new platform development software (on Bloomberg TV just now) might be a good time.
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timwest PRO
2 years ago
Can everyone appreciate how useful the plot of earnings-release days are to the chart? It is so important to know these dates and see these dates on your chart so you know in advance where the key levels were in the chart from NEWS in the past. It is key. It is essential.
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iggi8899 timwest
2 years ago
The earnings cues that trading view added is a great addition. I see what you're saying, you're looking at key action around earnings as reference points. This implies that daily and weekly charts are arbitrary compared to the bets made around earning days.
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iggi8899 timwest
2 years ago
So I re made the FB chart but this time using the earning dates to guide me more. as well as price into making the channels. Notice how the perception changes to an overbought market...
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timwest PRO iggi8899
2 years ago
Looks good iggi8899. If we are below an earnings report, then the market is weak. Once over the price of an earnings report and you have a foundation to build from. FB challenged the previous earnings report and could be in a weak spot now since it is below the last earnings release range. Earnings release is from the day before earnings to the day after.
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iggi8899 timwest
2 years ago
Points noted. This is an eye opener regarding a new charting approach. This last chart had one pass, but the difference invites more experimenting. I like the earnings range concept, ie "the day before earnings to the day after" , and the relative position re: earning report price areas
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aneisharora
2 years ago
incredible!
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DanV MOD
2 years ago
Interesting comparison. There is lack of price data history due to relatively recent IPO. But if I was to harmonies with other major stocks in similar sector and S&P500 which appears to be close to forming major top The recent top in Facebook could be major top too and is leading the market. My S&P500 charts analysis is indicating a drop to 2009 low over next couple of years. If correct Face book could be heading a lot lower too. In that way I suspect 1987 carsh was very sharp but short lived. Face book will not faire that well. Here is my Chart with possible EW counts.
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2use DanV
2 years ago
Sadly, think so too
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aneisharora
2 years ago
just makes me want to buy some absurdly deep out of the money puts.
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2use
2 years ago
Wow now that is a memory!
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xck799
2 years ago
As a novice this is very interesting and something to follow as a lesson. Tim I appreciate the help!
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godoftrading
2 years ago
Looks like FB is heading the other way... UP... But it needs to break 64.10 or so to solidify this upthrust...
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2use godoftrading
2 years ago
too early to say actually
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raitonryu
2 years ago
It does look like the endl of a big wave
But waiting for an explosion in volatility before riding the wave .
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raitonryu raitonryu
2 years ago
snapshot
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timwest PRO raitonryu
2 years ago
I like how similar and comparable they are. If anything, FB is weaker than the S&P500 was in the drop off of the high in 1987. Notice the lower 20 day BB fell under the long term moving average (in white) sooner.
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raitonryu
2 years ago
snapshot


But this is not exactly the same wave
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2use raitonryu
2 years ago
Wow, how do you get this chart? Don't tell me its not automatic and you add all manually?
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raitonryu 2use
2 years ago
well I added all of them ... manually (and saved as a template) and every time i run this template my laptop begin to run faster ;)
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raitonryu raitonryu
2 years ago
But i think it another way to look at the market, My point of view is that market make wave and we are surfer who try to ride on it , our goal ride the biggest wave possible, we call them tidal wave
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timwest PRO
2 years ago
Note how FB rejected at the Earnings Range - a valuable level of key resistance -
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DJCYStocks
2 years ago
Hi Tim, Thank you for the great work, I am learning a lot. How can you measure a time range on a predicted price target as the one you have on your chart?
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timwest PRO DJCYStocks
2 years ago
Note the link to the 1987 stock market crash and the nearly IDENTICAL price charts showing that there are nothing but longs in the stock with stop orders below the price. A stampede of this magnitude will often reverse itself in 25%-33% of the time that it took to create the up-move. It basically collapses on itself. I didn't want to predict a massive, ultra-fast meltdown, but I think it will be fast if it can go under the key support levels and put the balance of pressure on the longs. For now though, if the price is above the 57.50 then FB is in control by the longs. Note there are no daily highs below 57.50 since the last earnings report. So, the time forecast is basically 25%-33% of the time of the advance projected down. This is a patttern that you can find only once every few years, so there aren't a lot of examples of it. It is an Elliott Wave pattern called a diagonal-triangle-terminal as penned by Glenn Neely of NeoWave of "Mastering Elliott Wave". You can read all about it in his book. It is a serious textbook, not for light reading. Thanks for the question.
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