[TWTR] update

In the backlink I provided the model below.




Here is the real time update, zoomed in a bit relative to the weekly scale above (daily scale below).  This move since green C can be counted as an a-b-c and the herd certainly knew that the lower rail was there.

Just because this wave played out exactly per the model, that does not mean the rest of the model MUST play out.  EW is about odds and not about certainties.  But long time readers have certainly seen by now how accurate EW can be and how powerful it is even if the model is wrong simply because you know very quickly it is wrong.  For example, I called a peak at green C.  That means sell.  Now I model a support point here, that means potential buy.  But it also means if this breaks below the lower rail then it becomes a sell again.  So you can just set stop loss at 50 cents below the lower rail and come back in a week to see if you got stopped out or if it's headed back up to $52. 

Personally I think it will need a 3rd wave to break down that support and as you can see, it just had a 3rd wave collapse that could not break the lower rail down.  You very, very rarely get a gap down like this that cannot break support one day only to gap down the next day and break support.  And of course gaps down are the only fly in the EW strategy and even then probably only a 5-6% risk in most gap down cases.  I do think the odds side with another wave up into green E but if the DJIA suddenly breaks down, TWTR will go with it.

My long term view is that TWTR and most other social media stocks are essentially worthless and will all trade sub $5 in the coming years as people stop wasting their time with online social media crap and get back to work.  And why do I think people will have to get back to work?  Simply because we currently borrow most of our living from others.  That is what it means to have run the national debt up from $8 trillion at end of Bush 2 to $18 trillion today.  When we can no longer borrow our national living then we will drop all of our unproductive pasttimes like TWTR and FB and get the F back to work.