Follow-Up on the Facebook IPO: The Sun & Admetos Tell the Tale

My online and broadcast schedules have gotten short shrift for the past few weeks, mainly due to an intense travel schedule combined with the need to put in some extra hours on the final revisions for my upcoming book on Mercury and the Markets.

My travels took me to New Orleans for a week, where I was presenting some advanced astro-trading techniques at a global gathering of astrologers and traders. While I was there, I had a wonderful chat with one of our active Gold-Plus Elite members at FinancialCyclesWeekly.com. He works for one of the major Wall Street wire houses, where he advises international clients on positioning their portfolios for maximum profits in these turbulent times.

“I really appreciated the warning you put out about avoiding the Facebook IPO,” he told me. “My clients had been calling me up, wanting to know if there was any way that I could get them some shares of Facebook. I told them I thought they should stay away from it.

“But a couple of my clients absolutely insisted on buying Facebook. Fortunately, though, I was able to sell out their positions during the first hour of trading on the IPO day, so they managed to get a little profit before out before the stock crashed.”

When I looked at Facebook (FB) before the IPO it was clear that bad timing– putting the shares up for sale just before the May solar eclipse– would have an adverse effect on the stock’s potential. But I also mentioned a Sun/Admetos conjunction as one of my other concerns, and that’s what turned how to have a longer-lasting impact.

As is so often the case, the astrology proves to be exactly right. In fact, that interaction of the Sun and the transneptunian Admetos is what continues to drive the price action for this stock.

As this trading chart illustrates, Facebook opened its first day of trading almost exactly at a price point corresponding with the Sun/Admetos conjunction, and after a brief upward surge, started heading south from there.

During the next two trading sessions the stock moved lower, in each case starting its trading below a lower eighth-harmonic Admetos price line. More recently, FB has found some support on a fourth-harmonic Sun line, but an eighth-harmonic Admetos line is still defining a resistance zone.

What will happen during the coming weeks remains to be seen, of course, but this Sun/Admetos interaction points to a potentially critical date for this stock: July 3, when the Sun and Admetos will align in a 45-degree semi-square.

July 3 will be a shortened trading day because of the U.S. Independence Day holiday on July 4, when the markets will be closed altogether. Although this suggests that we will see reduced trading volume on July 3, it also points to an important trading period for Facebook.

Although the buyers who are still hanging on after the disastrous IPO would certainly love to see a trend reversal to the upside then, it seems just as likely that FB may be subjected to even stronger selling pressure.

2 thoughts on “Follow-Up on the Facebook IPO: The Sun & Admetos Tell the Tale”

  1. A quote from Charles Jayne re: eclipses.

    ” A good rule to observe is to initiate no vital action or decision within one week or ten days before an eclipse…things that are started shortly before an eclipse have a way of being stillborn, not working out in the manner intended or expected”.

    The point of the eclipse will be translated by Mercury on May 24 and then Jupiter on on June 12,13

    1. Seventy-seven years ago, members of Congress eretced a tariff wall aimed at protecting American business concerns. The result was a stock market crash followed by drastic retaliatory tariffs and a shutdown of the global trading system. The 1932 Revenue Act made matters worse by massively raising marginal tax rates on domestic incomes. These blunders set the stage for the Depression and world war that followed.Current members of Congress appear to have let their history books collect dust: A raft of anti-China currency and tariff legislation is now widely supported by both political parties as the exigencies of political grandstanding subvert the ideals of sound policy. At the same time, Chinese government officials have threatened to dump some of the government’s $1 trillion in U.S. Treasury securities if Congress continues its currency bashing and tariff threats.This fiscal folly couldn’t come at a worse time. Financial markets have been reeling over the last several weeks as hedge funds deleverage from wrong-way bets on mortgage products. It certainly doesn’t help matters that a tone-deaf Congress, led by a bi-partisan coalition of the economically obtuse, is attempting to advance legislation that would raise tax rates on investment companies as part of a “fix” for the alternative minimum tax (AMT).Has anyone in Congress ever stopped to contemplate why London has once again become the financial capital of the world? Perhaps it has something to do with the fact that the rest of the world is lowering corporate tax rates and trying to moderate regulations while the U.S. is stuffing Sarbanes-Oxley down the throat of its businesses.If that weren’t bad enough, the 2001-03 tax cuts on incomes and capital are essentially on the chopping block, set to expire in several years time unless Congress and the president act to extend them. The current Congress isn’t disposed to extending the tax cuts, while online futures trading points to a Democrat sweep in 2008. In other words, there’s a high probability that tax rates are going up.Some politicians argue that the current anti-trade sentiment has been driven by wage inequality and poor income growth, “tax cuts for the rich,” and high energy and food prices for the poor. But the data refute this. Personal income has grown at an average pace of 6.2 percent since 2004, despite large swings in reported GDP growth; personal income is up 6.1 percent year-over-year as of June, right in line with the average of the last few years. And thanks to a low unemployment rate and a tight labor market, real non-supervisory wages are growing faster today than they were at this stage of the last cycle (1.6 percent vs. 1.3 percent, year-over-year).In fact, low-end (non-supervisory) real wages have grown at about twice the pace for this cycle compared to the first 23 quarters of the last expansion. A broader measure of real non-financial compensation per hour also shows superior wage growth during this cycle (1 percent per annum average vs. a 0.3 percent per annum average at this stage of the last cycle). So to call this a “wage-less” expansion is utter nonsense, despite the fact real GDP growth has averaged 2.7 percent per annum this cycle versus a superior 3.3 percent average at this stage of the last cycle.Attention protectionist stooges: Since the implementation of NAFTA in 1994, real non-supervisory wages have grown at an average pace of 1.2 percent per annum, triple the 1971-2007 average of 0.4 percent per annum. Inflation-adjusted household net worth has jumped $22.2 trillion since NAFTA was implemented while non-farm payrolls have increased by 24.9 million. Manufacturing output, far from falling, actually stands at a record high, and is up 62 percent since 1994.Undoubtedly some have been left behind by the global economy. But free trade, China, and Wal-Mart for that matter have dramatically increased the standard of living for most people, just as protectionism, a trade war, tax hikes on investment and work, and the absence of Wal-Mart would sink living standards for most people.While the global boom continues on the back of pro-growth policies around the world, Congress is speeding down the road to ruin with trade protectionism and a raft of untimely tax hikes. It’s time to take a detour and think about the hugely anti-growth consequences of turning our backs on the global economy and pro-growth tax policy.

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