John Mylant's  Instablog

Technically Speaking

RSI- last time the RSI indicator touch the 50 day moving average, it defined below. This touch was just under the 50 line in that it bounced back up. This is the pattern it had the last three times in a row for the SPY and if it does it again I believe the stock will continue to move up. But you have to wait and see on this because it doesn't look like the RSI is finished moving down yet.

MACD- after the same manner, the MACD indicator defined a top and then started to move down but the moving averages do not look like they're finished moving down yet. In fact, it looks like they're still spreading apart which is an indication to me that as the week progresses there still going to move down.

Bollinger Bands- I would expect the stock to move down and touched the lower Bollinger band. I believe it could happen this week and I wouldn't be surprised if it took a bounce move back up and came back down and tested it again. I am looking at a combination of the lower Bollinger band and the 50 day moving average to see what the stock does in terms of defining a support level.

Summary- there is no doubt the stock still looks like it's moving down. In fact in my observation it looks like the stock has not yet found a base in this wooded searching for. If it's going to move back up eventually I don't believe it's going do at this coming week because the momentum is still bearish in the short term.

Current Events

Standing conventional stock market wisdom on its head, investors may wish for weaker-than-expected employment numbers next Friday. A strong jobs report could prompt an early end to the Federal Reserve's policy of pumping money into the banking system to rescue the economy and set off the stock market's long-awaited pullback.

The Fed's loose monetary policy since the end of 2008 has kept interest rates low and propelled stocks to record highs.

To be sure, better-than-expected jobs data would be evidence of strength in the economy, a positive for the market in the long run, so any pullback could be short-lived.

A rotation out of high-yielding dividend stocks has already begun because of the rise in U.S. Treasury bond yields.

Dividend stocks had been among the market's leaders for much of this year's rally as investors favored those shares over fixed-income securities in a low interest-rate environment.

A preview of the jobs picture will come on Wednesday with the release of a report from payrolls processor ADP. Economists polled by Reuters have forecast that the ADP data will show private-sector employers added 165,000 jobs in May, compared with 119,000 in April.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

As I view many of my "friends" updates in the middle of my Facebook page, it reminds me of Twitter. In our fast pace society the limited notes that Twitter provides has a definite place because people often don't want to read my news details, they just want the skinny. As time has progressed I find it interesting that different sites continue to pop up and slowly chip away the stones of "Castle Facebook" desiring pieces of its market share.

One thing that I can't do on Facebook (FB) is blog. This is a huge part of being able to put my thoughts online and I think this is a big area that the company needs to address because other social sites that provide this are popular. Tumblr for example gives its users more freedom and control in this arena. Facebook has its "notes" but as I observe the website it doesn't look like an important area the powers that be at Facebook encourage us to use. But it is the best/closest thing to a blog that I can see on the site.

Every day I put information on my Facebook site about my business, but it is just quick "twitter like" information that people can see quickly. There is no sense of identity to it; it is just pieces of information. This is how I "update" my site and it makes sense that this section is called "update" on Facebook. There is not much ownership to it as much as it is just a place to add new quick information.

I don't have a Tumblr account but I do know there's more freedom here where ideas can also have pictures and other things alongside and people "re-blog" so that users actually share thoughts and ideas with each other instead of "like" as you do on Facebook. There seems like there's less interaction.

A quick education for those of you that may not know, Facebook bought Storylane back in March 2013. The employees of the company have now become Facebook employees. The company was originally started as a social networking site that focused on "personal stories." It differs from social sites like Twitter because it wants people to spend more time "blogging" experiences instead of giving small tidbits of information. Whereas twitter and Facebook to an extent provide short updates, Storylane encouraged users to share longer stories about their lives.

As people are looking for more ways to express themselves on the web, I believe "blogging" is of great interest to people who desire to spend more time writing about their experiences in this may be the reason that Tumblr has grown so quickly. I wonder if the former employees of Storylane are going to assist Facebook with a "blog-type service" that will be revealed sometime in the near future?

How would I envision a blog on Facebook?

I am of the opinion that this would be a very important addition to Facebook and it is something that would have to be easily and instantaneously accessible from one's home page. Using our "status update" would be the easiest way to move into writing something so it should be attached. We have feeds on our site that our friends can see but they would also would need to be a way for our friends to see the new blog posts that we have put up.

This would be a great addition for Facebook because it would add to what is commonly termed "impressions" for the company. If Facebook users were given full blogging features how many new page views you think the company would rack up on a daily basis? One feature that Tumblr has that Facebook might cannibalize would be a re-sharing or re-blogging choice. Similar to its "share" concept that we can do now through pictures or other things, this could open up idea-sharing beyond just friends on Facebook. It just seems to make sense that Facebook should have a full blown blogging feature for us.

I remember years ago when I was on MySpace before Facebook vaulted in popularity. One of the things that may have helped the latter was its organization and simplicity. MySpace appeared be more self expressive, but it was also chaotic looking. Facebook appeared to bring order to sharing but I believe today, years later, providing a blogging service that allows more self-expression is a viable tool that could really help Facebook.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Technically Speaking

RSI- the recent pullback in the RSI indicator has brought the stock below the over bought position will. It is too early to tell whether or not the RSI will continue to move down.

MACD- the MACD indicator has reached the top and it looks like it's now on its way down. This supports the move of the RSI indicator but I would like to point out (click to enlarge)another observation. If the cross over happens the stock could continue down but if it moves sideways this could point to stronger momentum for the stock to keep moving up to watch.

Bollinger Bands- having come to the middle Bollinger band for support, I will be curious to see if the stock will push through the band. But it looks like it has formed a week-but well-defined support area. This is a very important point to watch because it could defined whether the stock will move up or if it's just resting before moves down again.

Summary- this present move down is only to the middle Bollinger band so far, and because of this I would not put a lot of importance on it-just yet. The stock looks like it might have built a weak foundation which could see it move up again, but I'm not sure you will have to wait and see. I am going to watch the MACD indicator to see if it moves sideways and this will tell us a little bit more about how the stock will be moving over the next couple weeks.

Current Events

The Dow rose for a 19th straight Tuesday before the slump began in later trading Wednesday. This is the longest Tuesday streak in history and the second-longest weekday streak ever. Will we go for 20 Tuesdays when Wall Street opens next week after the long holiday weekend?

The last week in May will also bring data including a second pass at Q1 GDP, a read on consumer confidence and some more housing numbers.

This week could make it harder to figure out, considering that the long Memorial Day weekend typically signals the start of the summer.

Much of that rally has been driven by the Fed's continued economic stimulus. The pickup in volume suggested to some a shift in sentiment, though activity has been below-average throughout the rally.

That's why Wednesday's reversal - where the Dow and the S&P 500 both rose more than 1 percent during the morning, but fell more than 1 percent in the afternoon - caused many investors to take notice.

"That's a change. Historically, when you get that kind of a reversal day, it kind of stalls things out for a while," said Frank Gretz, market analyst and technician for brokerage Shields & Co in New York.

Economic data has remained mixed, adding further uncertainty to market projections.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.