Facebook IPO Tomorrow

Today our "Goldman Rule" applied as it did not get above $100 and thus there was no market rally.  It reached a high of $99.94  Instead both Goldman Sachs and the overall market plunged again today, closing at the lows.  The DJIA has closed down 11 of the past 12 days, nearly an all-time record.

If we're lucky enough to have another market drop tomorrow, the DJIA should find significant support in the range of 12220-12300 and rally from there no matter at what level GS is trading. 

Today the DOW Transportation Average closed down over 3% putting it in the red so far in 2012 and exactly at its 200-day moving average.  The DJIA is back to where it reached on January 5th.

The Facebook IPO hits the market at 11 AM EST and will trade on the NASDAQ.  We're sick of hearing about it, as it's one of the most overhyped IPOs in history and that's really saying something given the tech bubble in the late-90's.  However the hype likely won't end soon as a decent market bounce is due and the Facebook debut will likely be credited for saving cascading equities worldwide.

Credible reports are widespread that those who have shares have ramped up the amounts they plan to sell to the public tomorrow, in some cases very significantly. We'd do the same, had we any. It's also the case that many Facebook users plan to buy the stock, some of whom have never even bought an equity before.

To Joe Granville is attributed the very apropos quote, "When the public demands the bag, it's a good idea to give it to them."   Silver at $50 also comes to mind.



Speaking of tiresome tech stock hype and hypervaluations, it's such a shame we were a few weeks early on the AAPL short.  It seems a long way down to any apparent trend support.

In that chart we see a roughly 19% drop in less than two months, despite record-breaking earnings coming out mid-way through that tanking.  The tide of sentiment is all that really matters in pricing, and what goes up almost invariably comes down as history and human nature repeat ad infinitum.

PAAS, Pan American Silver Corp. 5-year chart:

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