Alternate model for $COMPX peak.

In this post I presented one possible mechanism for $COMPX wild optimism to peak.  Below is an alternate way for the same thing to play out.  The red line is basically an indicator that the prior model (the one in the link) is playing out.  This simply means that the peak would be delayed into next month.  The blue line would be one final, ridiculous Ponzi pump rise, one last short term, short busting hurrah.  The low level waves can be read either way and indeed the market likes to give itself this kind of flexibility.  However, the trigger is clear: a higher high than 4484 tips the scales toward blue while some increasing selling pressure in the coming days will indicate red.

The excitement for FB and other social media darling stocks is now all accounted for in their share prices which are clearly sitting at dot bomb valuations.  FB made a measly couple billion dollars last quarter yet its current market cap is a staggering $192 bn with a B.  IBM, a real company, is only at $194bn. Market cap.  Now, which adds more value to the economy, useless FB or IBM?  Again, the valuations are manic in nature and thus temporary in nature.  A crash for FB and the rest of the $COMPX momo stocks is assured.  The only thing that is not known is the exact timing but I think that all you have to do is watch the interest rates to figure it out.  All of these crap stocks are being bought on margin.   That means they will collapse just as fast as they rose.

Want to see what mania-think looks like in real time?  Look no further than Sam Collins' latest web post entitled "Put aside your fears and buy".   I guess that is similar to "hold your nose and buy".  Common sense be damned, stocks are surging and we don't want to be left behind, blah blah blah.  These same morons will be saying "the end of the markets is upon us" within 2 years.  That's what it will feel like when the debt Ponzi is in full collapse. 

And then the cycle will repeat because herd migrations are as cyclic in nature as the sun spots are.  Or, perhaps "because" the sun spots are.  Who knows what the real relationship between cosmic events and those on Earth really are but I think it would be a mistake to believe that there are no effects, no linkage, we are an island unto ourselves, etc.