T3’s Take T3: Pop & Drop at the F.B. Corral!
By Michael Comeau
1) Lucky 13 for Facebook
Yesterday after the close, social media giant Facebook (FB) delivered a massive earnings beat, sending shares as high as $133.91 in extended trading, or up 8.6%.
The company is seeing significant growth in mobile, higher revenue from Instagram, and improving user engagement metrics,
Facebook's huge numbers weren't exactly a surprise, since the company had beaten Wall Street's earnings estimates for 12 straight quarters, making yesterday lucky number 13.
This set the stage for a sell-the-news reaction, and Facebook finished well off the highs at $125.00 up 1.4% on the day.
However, Facebook shares are still doing incredibly well in 2016 with a 19.4% year-to-date gain.
2) Jeff Cooper on Facebook's Exhaustion Signal
This afternoon, my buddy Jeff Cooper issued an interesting take on Facebook's weakness:
FB is poised to leave a large-range Gilligan sell signal if it closes at/near session lows.
This is an exhaustion signal marked by a gap up to a new 60 day high with a close at/near session lows.
AAPL is a different pattern as its earning's gap was not a gap to new 60 day highs or 52 week highs or all time highs as is the case with FB.
My takeaway is that institutions are scale-up sellers on pops.
Tomorrow we get the reaction to two other FANG stocks (AMZN and GOOGL). If they react similarly to FB or don't blow out expectations, there may be nothing left on the table to prevent a slide.
3) Another Day, Another Grind
Given that crude oil is a major drive of equity market sentiment, I've been a bit surprised at how well equities have held up in the face of oil's near-20% decline off the highs.
And again today, we saw oil decline sharply… and stocks basically rolled their eyes.
The S&P 500 went nowhere for the second day in a row, finishing at 2170.06, up 0.2%.
In fact, the S&P hasn't made a 1% move since July 8.
Facebook and Apple's (AAPL) small gains today helped the Nasdaq outperform.
Biotechnology led the decliners' column today, with the S&P Biotech ETF (XBI) falling -0.5%.
Energy stocks were down on oil's decline, with oil service names showing notable dips.
P.S. My partner in crime Kurt Capra is hosting a FREE trading webinar after the close on Tuesday, August 2, 2016.