Is ten years enough to forget the last bubble?
FourSquare, a mobile social gaming app, got $1.35M in seed money last Sept, and is now raising $10M at an eye-popping valuation of at least $80M, with a whisper number of $130M (which I seriously doubt). Yahoo is rumored to have bid over $100M to buy them. Now Microsoft and Facebook are said to be in the hunt. The auction has attracted top-tier funds.
What are they smoking?
Foursquare is using location on an iPhone to create a social game of checking-in. GPS makes it easy to list the venues near you, and checking in to let everyone else know where you are is just a few quick clicks. Check-in a lot, and be mayor of your street! Whoopee!
Nothing fancy in the technology, but the game aspect has attracted attention.
Social gaming is hot hot hot.
Zynga is a social games company riding on Facebook. It has raised over $200M at sky-high valuations, and is whispered to be worth in the range of $5B. It is only three years old. BusinessWeek says it already has revenues of $450M for 2010 (whisper numbers are higher). Zynga runs social games on Facebook, played with virtual currency. A wackally named company called Kwedit even provides virtual credit for virtual currency. Sounds kwazy until you see how quickly those virtual coins are bought with real money. Over in China the virtual currency of QQ is big business. Zynga may create the virtual currency standard in the US.
It also may surpass Facebook in revenue, and may beat it to IPO.
Foursquare gots it big kickoff at the recent SXSW (South by Southwest) confab. Twitter got launched into public consciousness two years earlier at SXSW. Foursquare had been in a "check-in race" with Gowalla, a similar social app for the iPhone. Gowalla had raised more money ($10M) and been around a bit longer, but Foursquare got the lift. The chart above shows how rapidly Foursquare (blue line) has run by Gowalla (green line).
The key reason that it is getting all the attention from erstwhile smart money is that it reached 1M users in just over a year. Twitter took two years. Two years later, Twitter surpassed 100M. The VCs are betting Foursquare will do better. It is beginning to show a business model around local advertising. Check-ins get shared back to the venue, and the venue advertises to gain more check-ins. It has also started tie-ins with media.
If Zynga wants to own the digital currency of the web, Foursquare wants to own places.
I commented recently that Venture Capital was showing some life; in particular, hot deals were being bid up. Besides Foursquare, we have just seen Blippy run up to $46M value just four months after its $1.7M angel funding. Blippy is called "Twitter for credit cards" - it checks-in with credit card transactions! TMI?
Quora, a user-created Q&A service that is still in beta testing, was valued at $86M. Out of Europe, Tradesmith, a "Skype for invoicing", is said to be in the $80-100M value range just a couple of months after launch. And the most surprising news came from Groupon, a clever Chicago venture which allows groups to form and bargain for discounts. Groupon just raised $135M at an astounding $1.35B valuation. It was first funded only three years ago for $1M.
The Silicon Valley bloggers are starting to pick this up, with pieces this weekend from GigaOm and VentureBeat. The broader investment community has certainly looked at AAPL and its parabolic rise to almost make Apple worth more than Microsoft. Now the fever is spreading down to small private companies with big valuations.
We are seeing the ground shift from under the venture world. The Internet (mobile and web) can enable companies to launch and seek markets on surprisingly small amounts of capital. These web services can gain customers virally by the right combination of social, fun and utility.
This is different than the dot-com bubble, where gobs of cheap capital were used to buy users; this time cheap attention grabs users. The service needs to capture attention and grow via social participation. The capital is used to improve the scalability and breadth of the service, not buy customers.
So the VC community learned something from ten years ago. And they never forgot that many of these viral, social, game-play Acme Ventures will also go splat. So they bid up the ones that seem to have emerged into scaling.
That's it.
I quit.
This is bad news for all the bulls, because I have finally capitulated. I have done everything I can for you, making bold calls that the end is upon us, which are sometimes kinda right but ultimately NOT. I can't bear the 30 years of frustration ANY LONGER.
I QUIT!
And for you Gremlins, SCREW YOU TOO YOU LITTLE BUGGERS. NOW WHAT ARE YOU GOING TO DO FOR FUN, HUH?
So long suckers!
Posted by: Bird | Monday, April 26, 2010 at 12:22 PM
Ahhh.. another undercapitalized "perma-bear" sent packing . . .
Ding! Ding! Ding!
Posted by: JT | Monday, April 26, 2010 at 12:49 PM
Ahhh.. another undercapitalized "perma-bear" sent packing . . .
Ugh. Man, what I would give to have you get hit by a Mack truck going about 75 MPH.
You are one ugly POS.
Posted by: DG | Monday, April 26, 2010 at 01:01 PM
Let's talk about something more important: US Genocide. By my calculations, the US government is going to try to kill about 50-60 million of us in the next few years. My feeling was the bird flu was their first attempt, including forced immunization. But, it didn't work too good. So what will be next?
I would suggest that if you can't show taxable income of at least $100,000 over an extended period, you are a target. Be very careful.
Posted by: Mamma Boom Boom | Monday, April 26, 2010 at 01:15 PM
Hey Bird,
Sorry to hear that the market is beating you up so much.
If you take a break and rework your approach in light of what's been causing you trouble, you might find that the key was there all along.
Just a thought.
Posted by: DG | Monday, April 26, 2010 at 01:23 PM
'Treasury May Begin Selling Citigroup Shares Today'... http://www.bloomberg.com/apps/news?pid=20601087&sid=aSiyPa.9ZbKw&pos=2 ... I don't know much about the exact logistics of the government getting their money back out of the US banks, how much money, or how many are involved. However, the thought did cross my mind that this particular sale seems to have been put into action very quickly. I just wonder whether Uncle Sam thinks that the market is near some sort of top and wants to 'get out' whilst the going is good? I guess this question would be presented whatever the weather!!
Posted by: Chabazite | Monday, April 26, 2010 at 01:28 PM
DG, actually, we are still in my window. I have not been any more beat up. I have a good record over several years, tho I don't like my first 4 months of this year.
What JT didn't realize was that I SENT MYSELF PACKING ON PURPOSE.
I set impossible standards, which have yielded their good and bad results. I am frustrated because, like a true defective, my seeking of the holy grail is a projection of none other than myself. This doesn't mean that the holy grail isn't there (contrary to popular consensus), but I don't think you can have the outside without the inside.
So I quit.
But where would I go? I'm not giving up just yet.
Posted by: Bird | Monday, April 26, 2010 at 02:02 PM
And Mamma, if I didn't like your boobs so much I would be a little worried about you too.
Posted by: Bird | Monday, April 26, 2010 at 02:04 PM
Bird,
I thought that from your last message a few days ago that we would still be in your window, so I was kind of surprised to see your post earlier.
Posted by: DG | Monday, April 26, 2010 at 02:35 PM
According to Ned Davis research, 90% of stocks are trading above their 50-day moving average. That's triggered a "breadth thrust buy signal."
Apparently there have only been 12 breadth thrust buy signal since 1967.
Two occurred in the last year. And this particular buy signal seems very robust. In the ensuing month, the S&P 500 has averaged a 4.6% gain. In the following quarter, the gain is 8.2%. And the gains for the entire year following a "breadth thrust buy signal" have averaged 19.7%. What's more, from the research presented, there has never been a loss for the S&P 500 in the 12 months following this buy signal.
Posted by: GlennLoserNeely | Monday, April 26, 2010 at 02:44 PM
DG, I am all over the place in my thoughts about expecting the unexpected. So I thought I would fail first and get it over with. Why is it that my worst trades are usually the ones in which I have near 100% confidence in and the best trades the ones that I am seriously doubting and inches from pulling the plug?
Posted by: Bird | Monday, April 26, 2010 at 02:51 PM
Bird,
I think it has something to do with what Livermore says about "needing to be greedy when others would be fearful and needing to be fearful when others would be greedy".
Posted by: DG | Monday, April 26, 2010 at 03:36 PM
Respected DG,
what is the probability this market will top on April 29th?
Posted by: NeelytheGuru | Monday, April 26, 2010 at 06:31 PM
"what is the probability this market will top on April 29th?"
Don't know. The theoretical probability is infinitesimally small, just like that is the theoretical probability of the market doing anything special on any given day.
That said, the wave count I've been working with for the past month is up against its time limit in this form. One issue I have is that there is a discrepancy between wave-.F in the SPY and wave-.F in the IWM. In the IWM, wave structure makes more sense if you end wave-.F on April 13th, rather than on April 8th, as I've done with the SPY chart. If you end wave-.F on April 13th, the SPY structure is off a bit, because the SPY made a low below April 13th's on April 19th, but that shouldn't happen unless wave-.G was going to be too weak to make a new high, which it obviously wasn't.
I'll put it this way: there isn't one truly convincing wave count out there that I've seen and this is the best I can come up with. If it's wrong, it won't be the first time.
http://yfrog.com/50spydaily8p
Posted by: DG | Monday, April 26, 2010 at 07:03 PM
DG and the rest of the gang here. Do yourself a favor and forget about counting waves for a while - this thing is way too devious and too complex. BTW, that's coming from a practicing/active Elliottician - you know my work.
There are tons of good and tradeable signals out there if one bothers to look. EWT has not helped us much in the past year, so let's not keep looking for keys where we didn't lose them.
I suggested a whole collection of indicators in my last few Sunday posts - they are free now, so come and get 'em while they're still hot ;-)
Posted by: molecool | Monday, April 26, 2010 at 11:49 PM
Hi. I am forex-cat.
Your article is always useful.
Thanks.
Posted by: forex-cat | Tuesday, April 27, 2010 at 01:45 AM
molecool,
I've worked out some logic-based trading methods that have been working nicely. The wave counts are an attempt to have a bigger-picture view of where we could be, but I don't trade on them right now.
Right now, the logic is such that if we go under 119.78 SPY before the end of today, that's a short signal. I already got a short signal on the IWM yesterday and we're fairly close on the QQQQ. The difference between this method and what most wave counts require is that I don't set my stop at the high on a potential reversal. That's what trips up most wave-based trades in this kind of environment. If you're making the assumption that the reversal happens at the end of a pattern, the most logical place to put a stop is at the extreme in price. However, since wave patterns are so unclear, that's a dicey proposition.
There's also a bullish trade setting up and given the parameters required for that to trigger, I wouldn't be surprised if it hits before the bearish trade. Also, using this method, I can hold a long and a short position at the same time, if necessary.
So, yeah, wave counts are something that should be taken with a grain of salt in this environment, but there are aspects of NeoWave logic which are able to provide important trading rules even when wave counts are unclear.
Posted by: DG | Tuesday, April 27, 2010 at 05:15 AM
hi molecool,
i tend to disagree with your comment that "Do yourself a favor and forget about counting waves for a while - this thing is way too devious and too complex." and "EWT has not helped us much in the past year".
i think the fact that most have not been as open to other possibilities as they should be or have been so fixated on the "Robert Pretcher" view has resulted in costly errors in counts. remember, when the "guru" gets it wrong, they all get it wrong. anyways, just my humble opinion.
Posted by: david | Tuesday, April 27, 2010 at 06:07 AM
I will soon be issuing an "Emergency" STU shortly in response to this important socionomic fact:
http://shine.yahoo.com/channel/beauty/the-return-of-capes-1338002/#photoViewer=1
Posted by: Bob Prechter, Wave-counter/Fashion Guru | Tuesday, April 27, 2010 at 06:43 AM
There goes the long trade. Will it work? Dunno, but price behavior is signaling strength.
Posted by: DG | Tuesday, April 27, 2010 at 06:48 AM
Levin and his buddies are attempting one goal, only: to distance the real crooks from the spotlight, the Government. Will it work?
Posted by: Mamma Boom Boom | Tuesday, April 27, 2010 at 07:34 AM
I'd rather be counting waves than trying to make money.
Posted by: GlennLoserNeely | Tuesday, April 27, 2010 at 07:53 AM
"I'd rather be counting waves than trying to make money."
Actually, it's assumed that anyone involved in trading is "trying to make money". No one is trading for their health, as the saying goes. The question is "How?"
Posted by: DG | Tuesday, April 27, 2010 at 08:05 AM
"i think the fact that most have not been as open to other possibilities as they should be or have been so fixated on the "Robert Pretcher" view has resulted in costly errors in counts. remember, when the "guru" gets it wrong, they all get it wrong. anyways, just my humble opinion. "
There is some of that, but even beyond that the market environment right now is, with limited exceptions, "non-trending" (cue up the chorus of "identify the trend and follow it" subjective nonsense) and Corrective, which makes wave counting quite challenging.
I don't know if my count above is right, but I am almost positive every other count I've seen is wrong.
Posted by: DG | Tuesday, April 27, 2010 at 08:16 AM
"There goes the long trade. Will it work? Dunno, but price behavior is signaling strength."
Posted by: DG | Tuesday, April 27, 2010 at 06:48 AM
Nice Call!
Dow Jones -110 points
Posted by: GlennLoserNeely | Tuesday, April 27, 2010 at 08:28 AM
"There goes the long trade. Will it work? Dunno, but price behavior is signaling strength."
Make that -147 points as the European Markets get hammered going into their close.
Posted by: JT | Tuesday, April 27, 2010 at 08:33 AM
GLN,
Yeah, but the way the method works, I got out already with a small loss. I use 39-minute charts to manage trades "up close" once I'm in, and when we surpassed the highs from the first 39-minute bar in the second one of the day, i.e. once the SPY went above 121.09 at 10:23 ET, I moved the stop to the bottom of the second 39-minute bar, which was at 120.86, which reduced my risk by 96.7%. The loss is literally a nickle a share, since my entry was 120.9.
Notice I didn't reference a wave count anywhere in there.
Trade entries are important, but I always emphasize stop movement and risk management to avoid just this type of scenario of getting caught in a "false positive" trade signal.
Meanwhile, shorts are triggering across the board.
Posted by: DG | Tuesday, April 27, 2010 at 08:36 AM
DG,
39 minute charts? That's a new wrinkle! I take it that is to get 10 equal length bars for the NYSE trading day.
The fixation on hourly bars has always bothered me - 6 1hr bars and 1 half-hour bar for the trading day? Doesn't make sense for any technical analysis method.
13@30min or 6@65min always made more sense to me - never considered 39min!
Posted by: Eventhorizon | Tuesday, April 27, 2010 at 08:50 AM
Eventhorizon,
Yes, totally agree on the shortcomings of the 60-minute bar. I use 78-minute and 39-minute. I started with the 78-minute to have symmetry between the intraday and daily time scales (5 bars per day, 5 days per week), then added the 39-minute when I started thinking about how to best manage risk if I was going to be trading Hourly-level signals.
I'm not someone who places much stock in numerological "mysticism", though. I just like symmetry and risk management.
Posted by: DG | Tuesday, April 27, 2010 at 09:01 AM
Real Time Trade Update.
Levered commodity shorts smoking today. Just finally entered 2nd tranch. Was not right until today. Have one tranch left to purchase. Need more profit foist.
http://finance.yahoo.com/q/bc?s=%5EDJUSBM+Basic+Chart&t=5d
http://finance.yahoo.com/q?s=SMN
This was imo a no brainer. Fibs, charts, counts around the whole wide world all added up.
First there was the cycle top on the Shanghai, a huge cycle top called by nspolar to the day (the 14th). So goes China so go commodities.
Second there was the sentiment on this board. Today was absolutely classic. Classic.
And there is more .... gold, oil, related gold and oil indices, BKX .....
And for Neely affectionados, look at the supposed B in the Shanghai, and find that same chart in Neely's book. Near to a tee. ABC-X-ABC-ABCDE. Neely's book is a very good book, he should have stuck with it.
Oil will hit 30 again before this over, that is the way I see it and smell it. And oil patch CEO's are going to have to swing the Big Axe like they never have before. And they will. They don't sit around putting off the pain, like auto execs. They swing the axe.
B's end and C's start when least expected. I am not calling a B top, but it appears the chances are good. We need to see how deep we go and of course the rebound. Bulls have been bullish as hell here, and bears will confused as hell. IF the C has started it is going to be a long cycle, by my reckoning.
ns
Posted by: nspolar | Tuesday, April 27, 2010 at 09:58 AM
>US Genocide. By my calculations, the US government is going to try to kill about 50-60 million of us in the next few years.<
This must be old news to everyone.
I'm always late.
Posted by: Mamma Boom Boom | Tuesday, April 27, 2010 at 10:06 AM
"This must be old news to everyone.
I'm always late." - Mamma
Dude, you aren't even on the playing field, so what does it matter???
Posted by: JT | Tuesday, April 27, 2010 at 10:11 AM
>Dude, you aren't even on the playing field<
Dude? Playing field? Are you as simple as you act? I suppose your going to order a hot dog, about next.
Posted by: Mamma Boom Boom | Tuesday, April 27, 2010 at 11:32 AM
http://my.yahoo.com/?.mt=6nRL7J2MhYv2K11rbAgedKyrSXolIpFt1Ls-
My my what a difference a day makes.
Is da shit hitting the fan here? Or will it all pass?
We may be at a rare confluence of global events, to furnish the impetus for a long C down.
Europe in a debt mess that should not end nicely. How could it? Who is going to bail them all out?
China in a bubble that would only seem to have one ending?
And in the US, it is going to turn into me, myself and I. The Tea Partiers are a classic example. I made mine and I don't want anyone else to have any. I think the US is done with bail outs. If there is much more we will have rioting in the streets.
Basically we have to wipe it all off the books and start over. And we will.
This possibility appears to be inferred by the strength of the dollar. It is still the world reserve currency, and will be bought in times of strife. I would say the dollar has a chance of breaking 100 on this run. I think it recently entered into a iii'rd wave up off the bottom.
My opinion of course.
ns
Posted by: nspolar | Tuesday, April 27, 2010 at 12:06 PM
>I think the US is done with bail outs. If there is much more we will have rioting in the streets.<
I hate to disagree, ...but I do!
I think our economy is on life support, from the fed, until the end. And I think we will have much rioting in the streets.
Standard disclaimer: IMO
Posted by: Mamma Boom Boom | Tuesday, April 27, 2010 at 12:35 PM
"Dude? Playing field? Are you as simple as you act? I suppose your going to order a hot dog, about next." - Mamma
Let's face it.
You are a college kid playing on the Internet and acting like you are some sort of "wanna-bee" trader.
Thanks for your invaluable posts.
You are the best!
Posted by: JT | Tuesday, April 27, 2010 at 12:39 PM
Looks like the E-Wavers missed the TOP of the market. They were all looking for higher prices... every single last one of them.
Posted by: anonymous | Tuesday, April 27, 2010 at 12:45 PM
If this is a new bull market, then I guess bulls would call todays action should 'corrective'. Strangest damn corrective wave I ever saw!
Posted by: Chabazite | Tuesday, April 27, 2010 at 12:54 PM
"Looks like the E-Wavers missed the TOP of the market. They were all looking for higher prices... every single last one of them."
So are you now calling a "top"?
Posted by: DG | Tuesday, April 27, 2010 at 01:01 PM
DG,
As opposed to many E-Wavers that frequent these blogs, I don't concern my self with trying to pick TOPS or BOTTOMS. I simply want to go with the momentum of the market, which I did today.
Posted by: anonymous | Tuesday, April 27, 2010 at 01:05 PM
I watched some of the GS hearings today.
What is becoming clear here is that GS was the great enabler of this whole mess.
That is not to say that they did anything wrong (I'm not in a position to know) but to sell a company a long position in a CDO, while taking the short position on the same instrument and then buying puts on the long company's stock is just nonsense. All it did was allow GS to move paper on "I trust you to tell me what you earn mortgages". And that transaction alone allowed more and more of these mortgages to be made.
In the final analysis, GS has done great harm to our society. You cannot create and sell things that you believe are harmful to society. Just ask a chemical manufacturer.
Hock
Posted by: Hockthefarm | Tuesday, April 27, 2010 at 01:12 PM
Polar wrote:
"Basically we have to wipe it all off the books and start over. And we will."
You must have read CTC by Prechter. That was his exact position in 2003.
Hock
Posted by: Hockthefarm | Tuesday, April 27, 2010 at 01:18 PM
Hock,
I completely disagree.
I wouldn't expect the average Joe to understand what a market-maker is and how they go about hedging and arbing their market-making duties, but I would have thought that people who post on stock market blogs such as this would have a fairly clear understanding of how the RMBS and CDO markets worked, not too mention how investment banks such as Goldman, Morgan, Deutsche, JP Morgan, UBS, etc., facilitate customer trade by taking the "other" side of the transaction.
This is just "Market-Making 101A", yet it seems to be not only lost on those asking the questions in Congress, but also people here on this blog.
Posted by: Michael | Tuesday, April 27, 2010 at 01:22 PM
Fractals are all unfolding to the upside - Hank Wernicki 4/23/2010
That was a brilliant call!!!
Posted by: Don | Tuesday, April 27, 2010 at 01:26 PM
" I simply want to go with the momentum of the market, which I did today."
See, this is what I find funny about your posts.
Can you honestly name ONE trader who wouldn't, if he or she could, "go along with the momentum of the market"? You seem to really believe that there are people who don't mind losing money, which is just a bizarre viewpoint.
Statements like this, with no context for HOW you determine the momentum and when it shifts, undermine any sort of credibility. I posted this morning that the market was a short under 119.78, which, to me, was a change in "momentum", to use your term. Where was your shift in momentum, price-wise? I'm not saying you need to give away whatever your "secret sauce" is, but you've been posting here for months, badgering everyone else about even DARING to take a short trade on any basis like it was your f-ing job to keep the entire world bullish or something. WTF gives with you already?
If you're such a great trader, enlighten us peons with some posts that say something useful, rather than all this after-the-fact claiming to have "gone with the momentum". It's a bunch of BS, if you ask me, which, of course, no one is, but I'll say it anyway. And, I think your constant badgering of everyone saying they're "not real TRADERS" is actually a pre-emptive defense to keep others from realizing that, in fact, YOU'RE not a TRADER.
It's easy to play "King Trader" who never misses a reversal of "momentum" when you don't commit yourself to anything prior to that shift. It would be like me suddenly saying, "Hey, why are you bears complaining, didn't you detect that shift in momentum in March of 2009?", as if I'd been playing the long side all along because of my super-duper momentum shift detection technology.
Man, you are annoying in that respect.
It's like playing poker with someone who never shows you his cards when the hand is over, but claims to win EVERY SINGLE TIME and then gets all pissy when you don't let him grab the pot. It was merely a little bit odd at first, but it's beyond ridiculous at this point to keep claiming you've nailed every short-term bottom and top.
Posted by: DG | Tuesday, April 27, 2010 at 01:30 PM
"This is just "Market-Making 101A", yet it seems to be not only lost on those asking the questions in Congress, but also people here on this blog."
God, if you can hear this prayer, please let "Michael" find a blog better suited to his super-genius. I feel so bad for him having to slum it here with we poor folk who don't know Market-Making 101A. Amen.
Posted by: Guy who worries that Michael isn't getting enough intellectual stimulation from the other posters on this blog | Tuesday, April 27, 2010 at 01:34 PM
Odds are very high that equities rally, from this point. It's playable! 1-2-3 days. But, more importantly, the broad market has broken down again. Will the PPT be able to run in and save it, as it has done 3-4 times in the past year? I don't think so, not this time. Hell, they might even be thinking about teaching everyone a lesson, about right now. I don't think they're very happy.
Blaaahhhhh!
Posted by: Mamma Boom Boom | Tuesday, April 27, 2010 at 01:37 PM
"You seem to really believe that there are people who don't mind losing money, which is just a bizarre viewpoint." - DG
No, I don't believe that at all. Those are YOUR words, not mine.
What I believe is that there are people like yourself that are so "bogged-down" by your application of wave-counting and a "sophisticated" theory (your words) that you aren't able to pull the trigger on how the market is actually behaving.
One only has to look at your posts over the last several months to see how Bearish you've been, and how utterly wrong you've been.
I'm sure I'm not the only one that has noticed this as there are plenty of others here that have observed the same behavior from you.
Posted by: anonymous | Tuesday, April 27, 2010 at 01:37 PM
From Tony Caldara "MEDIUM TERM: uptrend in jeopardy"
Didn't I say, less than 2 weeks ago, that it's time to see all these bears turn bullish. It's what you have to see, it's mandatory. BINGO!
Posted by: Mamma Boom Boom | Tuesday, April 27, 2010 at 01:42 PM
The China-man's market was quite playful today. Whoa!
Posted by: Mamma Boom Boom | Tuesday, April 27, 2010 at 01:46 PM