Thursday, January 30, 2014

Facebook - Similar Situation To the Broad Market

Yesterday I published the charts showing the actions of the so-called Smart Money.

Today let me show how the Smart Money perceives the shares of Facebook. I guess this is a right time for that due to the latest report published by this company. It is not my intention to elaborate on the Facebook's financial results but only on the market action.

Firstly Smart Money's actions:

                                                                   source: Simple Digressions

As the chart shows, although Facebook shares are up 57%, Smart Money has been selling heavily in the reported period (down 32%).

Now Big Money's action:

                                                         source: Simple Digressions

Big Money started to correlate with the broad Smart Money index in October 2013. Since that time the Big Money index has been falling. As you can spot, the most impressive movement was at today's session.

Conclusion: Facebook shares are another example what Smart Money does. The late stage of the bull run on Wall Street is being used by the big players to sell as many shares as possible.

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