Quick recap and outlook.

The Dow took off out of the gate today but I knew it was bogus because the $COMPX was weak all day.  And then around noon the $COMPX started showing uncharacteristic weakness.   Same story for the S+P.  The Dow was outvoted 2:1.   Of course it's really many hundreds to 1.  Many people still don't know that the DJIA is just 30 companies.

In any case, all 3 indices looked like gazelle being chased south by the lions near the end of the day.  So I do actually think I can make a case for saying that the sell off really did start today.  I know, it's pretty brazen to wave the bat at the center field fence like that.  But hey, it's fun.  Besides, the signs are all in place and so just trying to call the exact second when it turned from bull into bear is only for entertainment purposes.

I do think there will be follow through downside in the AM tomorrow and it could be significant.  I see that the close left us with a 2nd of 3 wave in both the NAS and the S+P.  The stutter step produces an extended 3rd like this: 1-2 and then 1-2-3-4-5(3) and then 4-5.  3rd of 3rd should produce some gaps down.

CMG did most of what it needed to do today.  In this post I suggested that the stock was within a very few days of peaking and I wrote, "This is not much of a throw over for such a long run.  Perhaps it turns into an ending diagonal.  If so, it's first move down starts today, perhaps tomorrow to define the lower rail.".   Today it added to the throw over and almost finished an ending diagonal as you can clearly see from today's chart.  If this goes up another quick $10-$12 tomorrow near the open then it will be the perfect setup for shorting it into the dirt.   

Now, just to be clear, I have nothing against CMG.  I suspect that with the Hispanic population of the US on the rise that Hispanic ethnicity will be a good seller in years to come.  And I do like the fact that it has some cash and no debt.   But trailing PE of 56 and forward PE (AKA fantasy PE) of 37?  For a restaurant?  I don't care if you serve filet all day, your restaurant will not maintain a PE of 37 in bear stock market.  In fact, you will be lucky to get PE of 7.  So the downside for CMG might not even come as a result of poor earnings.  All it takes is PE contraction and this thing goes down by 50-80%.

Bottom line is that the stock is a Ponzi pump and if the CEO gave 2 craps about the long term success of the company he would be making all haste to sell more shares to anyone stupid enough to buy them (AKA your pension fund and your 8% annuity that you will never receive).

 
 I won't say too much more about Priceline except that if you own the shares then you should sell them immediately.  This is not investing advice!  I don't give free advice.  This is my stand up entertainment routine.  I feel that if you sell those Ponzi Pumped shares that you will be laughing your way to the bank and that anyone who holds them will be much, much less entertained.  Priceline shares, according to my models, are going to collapse in a way seldom seen in the markets.  71 billion with a B.  That's what their market cap is.  Here is what will happen: the economy will go down and those who use PCLN services will figure out how to do without it.  They will downsize their overcapacity so that they don't have enough overage that it needs to be sold by a 3rd party.  Something will happen in order to redistribute their revenues.  That chart just screams "mania".