Facebook Ponzi market cap is evaporating into thin air from whence it came.

In this post I correctly called the FB peak.  Since then the throw over has failed, the chart has broken down into the body of the diagonal even faster than it broke out in the first place.  The shares are likely getting near a bounce point at the lower rail.  After such a big sell off, we could see a dramatic"buy the dip" vee bounce that tests the upper rail from below.

The play on this one is clear: if you have shares in this Ponzi stock, sell them into any coming strength.  If you have no dog in this hunt and you want to enter the fray in a leveraged way (and it will become a "fray" soon enough), WAIT for the bounce and then go for some Jan 2015 $45 puts.  Ending diagonals are often known to retrace their full length.

If my model continues to be correct, this is wave 1 down.  Thus I expect a strong vee bounce into wave 2 soon.  I do not think that the lower rail will be taken out permanently by wave1.  That is the role of a 3rd wave - to leave no doubt as to the herd's new direction.  It is Prechter's so called moment of recognition.

Nothing goes straight up or straight down.  After 5 waves down into Red 1, FB will be due for a bounce soon that could take it back to the top of the channel by the mid to late April time frame, just in time to fail to break out of the upper rail from below and set FB patsies up for a massive, sudden 3rd wave decline that is going to line the pockets of put holders with cash.

NOTE: The above is likely the best case possible for FB.  This count is early and it could morph into something else that is far more bearish far sooner.  For example, this could really end up counting as below.  As you can see, the below model would result in the breakdown of both the top rail and the bottom rail - that's 3rd wave horsepower personified.  The odds of this happening are higher than normal because of the steepness of the decline.

Here's what I think about FarceBook:

• The original FB model is bleeding customers.  Most people I know have given up their accounts.  It used to be quaint to be able to see the kids, etc. but how many "selfies" can one actually stand to see?  Also, people have lost their jobs for wearing their lives out on their sleeves on FB.  Farmville and Zynga are useless wastes of time that even sheeple are beginning to tired of.  These things seemed like OK uses of time when the credit was flowing and the prosperity was so easy.  Now that reality is hitting home people will be in a less playful mood.  They will be more involved with worrying about how to pay bills and buy food when jobs are very scare.
• Zuckerman seems to know this. He is on a wild, money is no object spending spree trying desperately to acquire anything of value with the corporation's cash before it heads back down to $20 or less by EOY 2015.  In looking at his purchases they seem way overpriced and very "strategic" (and possibly even pie in the sky).  In other words, no ROI for a long time at a time when ROI will again begin to matter to investors (aka patsies).