It is quite interesting, and likely frightening, that ZNGA has been unable to ride on the coattails of Uncle Zuckie. With Farcebook, the bottom fishers have done extremely well, and the stock has vaulted from $17- back to $30-. These two stocks were supposed bed mates until that rather messy divorce, and many ZNGA fans cheered the split, but the success of this division is not reflected in the price of bull dog stock. The PR surrounding the rigged Farcebook IPO was not good to say the least, but a high level of euphoria now surrounds the stock once again. FB looks tired at these levels on a chart, and it is an excellent high probability short near the $30 price. For short term traders, an initial target of $25- seems very much in the cards. I expect a large decline in the major averages this year, on the order of 25 to 40%, so a revisit of $17- FB is certainly possible.
In terms of the big picture, Apple is the stock to watch. The breakdown is signaling that even in this society of button pushers, there is a limit to gadgetry. The market is saturated with these devices, and it is unlikely consumers are willing to update on a yearly basis to the latest hot model. I also think the boredom factor comes into play, and this has huge implications for both ZNGA and Farcebook. "I've been there, done that, and now I need some new drug to stimulate my bored and alienated mind." This is already occurring. As we enter a period of increasing economic challenges, I anticipate a backlash against companies gathering our personal information to be sold to the highest bidder. This will be a big problem for Uncle Zuckie, and in some ways his company, like ZNGA, is very fad like. Out of the ashes of the current economic decline, much worse than government and media are telling us, arises the spiritual revolution. Some will get to know their neighbors. A few will return to reading serious books. Imagine, some might even stroll on the beach without their hand held devices. Materialism and wealth accumulation will be revealed for what they are--empty notions.