Google update

Although it might not have seemed like it since May, GOOG shares likely entered a bear market in early April.  The first wave down trimmed more than $100 off the share price but then the wave 2 came powering back.  All this did was give the shorts another big shot at glory here.  Notice that the shape of wave 2 is clearly a-b-c in nature.  Also, it could not create a higher high and I don't think it will going forward given the way that the tiny ending diagonal of the past few days had a failed 5th.  It is actually not common for that to happen and it spells weakness.  Then the shares put in a small 1,2 and then began a 3rd wave yesterday so I expect them to literally begin selling off from the opening bell and to show some conviction selling.  It might be a tiny 3rd wave but it is still a 3rd wave.  They have a habit of making up for lost time.

 

For options players, this is the perfect time to load up on deep out of the money puts, just as the shares are about to slide off into the 3rd wave down.