Facebook face-plant or Trump tantrum?
By Colin Twiggs
March 29, 2017 1:00 a.m. EDT (4:00 p.m. AEDT)
First, please read the Disclaimer.
Facebook [FB] has done a face plant in handling the Cambridge Analytica debacle. The stock broke primary support at 170, signaling a down-trend.
Review of user privacy laws is long overdue and likely to clip the wings of the social media giant.
Google will also be affected, just not to the same extent. Holding company Alphabet [GOOGL] stock found support at the $1000 mark. Breach would signal a primary down-trend.
Fears of a Trump trade war seem to have dissipated and the market correction is now being led by a social media sell-off.
The Nasdaq 100 is falling but breach of primary support at 6150 now seems unlikely.
The S&P 500 index found short-term support at 2600. Twiggs Volatility Index remains in the amber zone, between 1% and 2%, suggesting that the correction is secondary in nature. Respect of primary support at 2530 is likely and recovery above 2800 would suggest another primary advance.
Economic indicators suggest the economy is still on track.
The Leading Index is safely above 1%.
Financial stress is near record lows.
Earnings growth is subdued, only a rise above 3% for average hourly earnings growth would likely prod the Fed into raising interest rates at a faster pace.
And real GDP estimates are rising not falling.
Nothing that a few tweets can't upset but the world is learning to live with erratic messaging from the White House.
I hope that you enjoy the Easter break and look forward to chatting with you next week.
A great civilization is not conquered from without, until it has destroyed itself from within. The essential causes of Rome's decline lay in her people, her morals, her class struggle, her failing trade, her bureaucratic despotism, her stifling taxes, her consuming wars.
~ Will Durant
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Colin Twiggs is director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.
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