Google update: I was early but likely not wrong.

I have been on GOOG topping watch for some time now.  Each time, the chart seems to find another way to extend itself.  The damage being done is really in terms of time, not price.  GOOG shares are only up a few measly percent since my first warning about them here and my first actual topping call here which was, believe it or not, only about ~$50 ago.  That is mice nuts in percentage terms for someone who tries to catch the very peak.

And as the peak approaches I can only be expected to make more frequent sniper shots at the target.  Each has a trigger point that indicates a missed call (higher high in most cases) but to the reader it can look random.  I say, not at all.  A sniper doesn't know all the factors between him and his target that is 1+ miles away.  There are a lot of factors that are semi chaotic and only by taking a few test shots can he know what they are.

My last topping call was indeed a short term top but the market decided to catch itself and move up again.  Which leads us up to today.  The next high probability topping point is now upon us as shown by the chart below.  A break down of that lower rail indicates that at least a 10% plunge is eminent and perhaps the start of much bigger break down.  The play is simple: short it on the break down of the red line and then set your stops just above the red line.  If the break down happen and it does so on a gap then your bet will likely pay off nicely.  If the shares trickle under the support line slowly then watch for the reversal back up into the channel.  If such a reversal happens it should do so pretty quickly. 

I really would have preferred to see a throw over to the up side but that is not a requirement.  These shares are already waaaaaaaay over-loved by the market even though most of Google's revenues come from ads and many of the click ads are " 'bot " generated (automatically generated by software robots) or generated by fake customers in 3rd world countries who get paid to click.  In other words, those paying Google for these ads are not getting to the real customers they care about and there is in fact evidence that it is becoming counterproductive to shove ads in everyone's faces every 2 seconds.  This is a major reason that I decided that Economati blogspot must be "Ad Free" as a basic charter tenet.   I decided that not having ads, basically working for free to provide value to any potential reader, would be one of my value propositions in order to increase page views honestly and over time.  The end goal is not to get click ad revenue but to give something back the world in terms of economic awareness and, of late, Elliott wave awareness.

But I digress.  I basically think Google is a huge pig in terms of market cap and in terms of products I think it is mainly a profitless research division other than ad revenue.  But when hard times hit, the first thing to go is the travel budget and the advertizing budget.  Having the whole company dependent on the ad budget simply means earnings can literally evaporate in a depression while the company is left paying a bunch of salaries and building maintenance costs.  As a long term play, Google is risky, risky, risky!!  It has too many toy projects going on and not enough real business. I say that it has wasted the past 5 years doing nothing of real value.  Hobby projects like Google Glass are cool and so are self driving cars.  But they are not generating revenues now or in the foreseeable future.  What if the economy goes "PIIGS" on us?

GOOG shares are way more risk than they are reward.  I hope GOOG bulls have their parachutes strapped on and are standing near the door.   This thing is ripe for a major pullback.