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Playing the Ponzi
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Why “Playing the Ponzi”? I view the entire monetary and financial system as something of a Ponzi scheme. Starting with currency that is created as debt, and running straight through a global economic model that is based on infinite growth in a finite world. This won’t end well. I’d go a step... More
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Playing the Ponzi
  • Update: CMG And LNKD Remain Attractive Short Candidates 0 comments
    May 21, 2012 11:01 AM | about stocks: CMG, LNKD, FB

    The S&P is giving us a strong bounce at the moment and may have much higher to go if shorts start feeling squeezed. Speaking of shorts, there are a couple of compelling short candidates that I'd like to update. I remain of the belief that CMG - while a fine company - is likely topping out as a stock. It formed a rising (bearish) wedge over the last 5+ years and has now clearly broke support on both the daily and weekly chart. A move to lower prices would likely take years, but it starts with a break.

    LNKD remains very optimistically valued. They broke under a steep trendline last month, then reported an outstanding quarter just a few weeks ago (the after-hours action and ensuing gap-up being the short term top), but have now clearly broken their supporting trendline.

    (click to enlarge)

    I suspect the market is due for continued upside follow-through from its oversold condition. A rally in price for CMG and/or LNKD may provide a nice shorting opportunity - particularly if they make it back to trendline resistance. I am also intrigued by the idea of shorting FB, but today's sell-off and the lack of pricing history makes me a bit more skittish. Fundamentally, I see FB as being a lot more like MySpace than a younger (NYSEARCA:IPO) Google.

    Disclosure: I am short CMG, LNKD.

    Stocks: CMG, LNKD, FB
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