As Google Goes, So Goes the Market

Posted on by The INO.com Team

Here is a quick update:

Yesterday Google (symbol GOOG) flashed a sell and go short "Trade Triangle" signal at $525.61.

This is a significant event as the last signal we had for this stock was a buy signal at $372.36 on February 6th, 2009.

Fibonacci retracement indicates that this stock could pullback all the way to $419.62.

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

38 thoughts on “As Google Goes, So Goes the Market”

  1. Interesting how wrong this signal was so far - you would have sold pretty much at the bottom. It will be interesting to see if it goes lower later?

    1. Liz,

      Thank you for your feedback. In regards to the Google signal we are out of this short position with a loss of around 4%. If you follow our trade triangle technology you know that we follow the trade triangles and that the signal on Google was a valid one which we would take again.

      I hope this addresses your question in a way that makes sense.

      All the best,
      Adam

  2. Marco,

    Yes you're correct. It is inbetween the 50 and 61.8% retracement area. It could infact go to the lower end of the retracement area, I'm just not sure at this point in time.

    Adam

    1. Thanks Adam

      But forgive my stupidness, why 419,62?
      Because its in between the 50% and 61,8% retracement?

  4. DG,

    I am hoping not, but I am a firm believer that history repeats itself. There is a old Hungarian saying that goes like this " The past is the teacher of the future".

    All the best,
    Adam

    1. Adam I'm trying to use the Fibonacci tool.
      I cant seem to get the $419,62 target.
      Im drawing it from the top of 4 jan (626) down to the low of 24 nov 2008 (257) Am I doing it wrong?

      thanks....

  5. Adam,

    When you looked at the 1929 crash, you no doubt did a Fibonacci overlay and saw that it was bang on!! Are we seeing the same thing today?

    Regards.

  6. I see my earlier response has appeared. Sorry for the redundancy. Good luck to everyone on Monday!

  7. Hi Sue,

    For some reason I don't see my earlier response to your question here...Yes, there is a bottom tail on Google. Combine that with contrarian view and overly negative sentiment ( high put/call ratio) and I see a bit of a bounce.

    However, Google HAS broken downside support and longer term I expect it to fall as per the trade triangle indicator. It's just that some of the bounces can be pretty easy ways to make 10-20% in a hurry. Of course, I always use stops in case I'm wrong so I know exactly what I'm risking.

    Cheers.

  9. DG,

    Thanks for your comments.

    Yes, I have studied the 1929 charts. I am a big believer in history repeating itself. Only time will tell.

    Adam

  10. Sue,

    To answer your question: Yes...and the overwhelming negative sentiment (put/call ratio extremely high) means there's no "market" downwards. I think we'll see a rally up before the trend downwards. One problem with using resistance numbers is we often don't acount for the bounces and get in too early. Some of the bounces in gold stocks, for exmple, can be as much as 25%...not a bad payday for a few days work in a down trend.

    By the way, for interest, have a look at the charts from the crash in 1929...except for the condensed timeframe today as opposed to then, they look exactly like what we've seen over the last year and a bit and may give a clue about what to expect.

    Cheers.

  11. Hi DG,
    You didn't say what chart you are using. When I look at the SPX, I do see a bottoming tail,is that what you're referring to?
    However, Fridays daily bar close is now bumping against resistance (previous support) and hasn't broken through it yet. You may be correct but I need another day (at least!!) to confirm a move higher now.
    Sue

  13. I can see where the breaking of resistance can lead Google lower...all things being equal. But the smart money that came in during the last hour of trading on Friday and the huge negative OI on the option side tells me it will rally, at least initially. So even if we wanted to follow the trade triangle indicator, we should put our short in at the upper rally point, not at the current price. Just a thought.

  14. Thanks Adam. I agree. First line of defense will be 486(lower weekly BB), then 470(50,200weekly MA). Enjoy your video's!

    CC

  15. In my humble opinion, we hit a market bottom on Friday and will see a significant rally in the upcoming week....especially in the commodities. The USD will fall. Be careful!!

  16. I suspect you're correct... even if you are not, it will take at least 4-5 days of gains with high volume to convince me we're out of a market correction.

  17. I hope I'm not making a mistake in sort of changing the subject here, but I was trying or falling for those Penny stock advertisements and at first did well, then as I kept it up, I lost most of what I even started with. I would like to do trading, and I think I would be pretty good at it, but I don't even know how to get started. Certainly I won't go for the penny stock pushers recommendations anymore, but how else do you start trading? I wonder if really anyone is successful at trading or is it all just advertisement so that the pusher can pump and then dump to the sucker? Any help please?

  18. Google looks extremely oversold with a positive divergence in the daily RSI. The weekly chart also looks oversold in the RSI. Technically there should be a strong rally, but the SPX says the same thing. After that rally lower is a distinct possiblity. Just a caution.

    Allan

  19. Hi Adam,
    I have been enjoying your tutorials.
    Since I was already enrolled in a trading mentoring program, as part of the program I have a trial subscription to "Profit Source" that uses Elliott Wave. I wish I could copy their chart, showing a wave 4 BUY signal on GOOG generated on Friday market close.
    This will be interesting!
    Myself, I am Bearish currently and like you I would hesitate to go long GOOG.

  20. GOOG has to fall 104 points from the high to get a sell signal? This is a perfect example of the inadequacy of technical analysis.

    1. Milton,

      We had a sell signal at $525.61. I am not sure I understand why you say GOOG has to fall 104 points to get a sell signal.

      Thanks
      Adam

      1. Milton may have limited understanding of technical analysis. We had to wait for a lower low to confirm the downtrend signal. From 530 till this date, there was no break of that prior upward trend. (No inadequacy here) Nothing personal, but Milton, you are lacking in your knowledge of technical analysis. If I look at the chart, I can see it. Wish you success in your future knowledge acquistion. There are no 100% guarantees out there. The info on this site is great if you have some knowledge on how to use it. Sorry, no one can write you a paycheque on any site. Learn the skills that Adam and Co. offer all of us. Regards, bdaspdr.

    2. Why 104 points? anyway GOOG high 629.51 ...it went down as low as 522.46 on friday. I am bearish.

    1. Tripp,

      I am not an expert nor can I give you advice on options but I do expect Google to come under further pressure. Many options traders key off our MarketClub's Trade Triangles.

      All the best,
      Adam

  24. Thanks, Coach! We did a near touchdown on DJ 9800 today, which I've been giving the hairy eyeball since your warning last week. Appreciate the consult!

  25. Thanks adam,
    I am new to market club and have been paying close attention to all the information in your video's and the whole set up market club has for traders. I would like to trade full time and I am going forward with this passion to trade. Just want to say thanks and I would like to move forward with market club.
    Regards,
    William Blankenship

  26. Seems like google held up well today didn't move much. Feb. 6th a buy signal at 172? I don't see that it was even close to being that low. I hope it was a miss print.

  27. Follow up comments on GOOG, well, I see the technicals as a quick shot up for a week, then down for another week, followed by a longer term upside. Very long term I see GOOG as a near $800 area..or more

    Just an opinion technically, wonder what the opinions of others are?

  29. Could you tell me where to find information/videos regarding the trade triangles? Like the above, sell and go short. Where can I find what those and other signals mean and how to interpret them?

    Thank you, Barb

    1. Hi Barb,

      Sorry it took us a while to get back to your comment. We received about 3' of snow in MD from a blizzard and unfortunately we have another foot on the way from what I've read. With that said, I wanted to provide three links so that you'll never have to wait for us to learn more about MarketClub and the Trade Triangles again.

      The Main HelpSection Page: http://www.marketclub.com/help/?ltblog

      The Trade Triangles Help Page: http://club.ino.com/trading/marketclub-help-section/flash-charts/trade-triangles/

      How to Interpret the Trade Triangles: http://club.ino.com:80/trading/marketclub-help-section/flash-charts/trade-triangles/how-do-i-interpret-the-trade-triangles-when-would-i-enterexit/

      I think you will find the last link helpful as it tells you how too enter/exit using the Trade Triangles depending on what market type you're looking at and what type of trader you may be.

      Please let our support team know if you have any questions. With the snow right now, the best way to reach our team is by emailing [email protected].

      Best,

      Lindsay Thompson
      INO.com & MarketClub

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