 Good afternoon, everyone, and welcome. This is Melissa Arma with the Stock Swoosh, and I'm revealing Facebook. Why? I'm revealing Facebook for one person, Herman, because I talked to him today. And he was asking me all kinds of questions about my golden gap system and my methods. And we're talking about trading. And Herman loves the market. And I got to love people to love the market like me. So I respect Herman for that. However, he was asking me all kinds of questions. And somehow, we started talking about Facebook. And he said that he made money shorting Facebook. There were some red days in here, not today, but this was the Friday, and then this was Monday. And I thought, let me go look at the chart, because I thought shorting Facebook, of all the things that I'd short in the world, I wouldn't be Facebook. Now, here's the thing. So I've been talking about gaps to Herman, because I trade gaps. It's all that I trade. I want to go over something here that may help Herman. Herman said, this is great, because of the fact that it failed to make a brand new all-time high here. So wait a minute, let's just go back. Let's just go all the way, all the way back. First of all, I want to point out that this was an earnings gap that happened on 128 in Facebook. It was a great buy. It was a terrific long. This was a good long here. And it rallied and continued for four days up. It almost got up to 118, very, very, very close. And in fact, I forget the post or pre-market on this here on this day. I can't go back that long to see, but it didn't actually get up over 118 on the live day here. But it had a beautiful rally. From the open of the day of the earnings, it literally rallied $10 plus in one, two, three, four days. That's fantastic. That shows a lot of strength for the stock. And if you remember correctly, let's go back. The market wasn't doing anything fantastic here. So this just did it. 128, just want to show you something here so you see what I'm talking about. 128, 128th of the market fell. The day that the Facebook came out, market dropped, gapped up and fell. Had a big day here the second day, didn't go anywhere here this day or this day. So Facebook really did its own thing, which was following through on a quality bullish gap up on earnings. This is the kind of thing you want to see. Now what happened here? Well, the market wiggled and jiggled in here. This was early February. I remember this time period. And market fell. It broke the scat, did that matter? No, would I have shorted this? No, no I wouldn't have. Anyways, the stock immediately rallied, rallied, rallied, rallied. It's been going straight up since and it did not make a new high here. But what does that mean? Does it mean that you shorted it? No. Does it mean it's not going to make a new high? No. No, no, no, no. This is a bad buy point to buy it here. You buy bullish gaps, okay? And this actually wasn't a bullish gap, but I wouldn't short it. I wouldn't even short it intraday. Could you have made money shorting this here? Yes. What I've done this know. Actually, you're shorting a bullish gap here because the stock actually closed here and gapped up. Gapped up on this day and fell. Just didn't hold the support and probably was the day that was right in the market. In fact, it was because it was two days ago. I remember it was the Friday. So this fell in here with the market that day, that's all. And it gapped up. So again, this is a strong stock. I would not be shorting this intraday and I wouldn't be shorting it overnight. If you're gonna do anything, you go along it in a bullish gap. Boom, that's it. If you go long and short something in the same stock, your mind gets all screwed up in the head. So there's a couple of things that I teach people. Number one, I teach them how to rate gaps and pick the best thing to shore to go long. What is Facebook? It's a long. Who's in control of the stock, the bulls? Would I ever short this? No, why? Because I don't have any conviction that the stock is gonna go anywhere to the downside. Why? Because there's one person in control of the control of the power of the money and that's the bulls. Herman was saying to me because it failed to make a new high here for its lower. No. In fact, I will tell you right now that this stock is higher. It will go over that number. It will not even pull back here. I don't even think it pulls back here. In fact, I don't think it does at all. Now that I'm looking at this, I have 100% conviction it doesn't pull back here at all and will go over the high before it even would pull back here. It's not to say it will never land here again but it will make a new high over the 117.60ish number before it pulls back at all. It's easy to look at something and say, well, it failed to make a new high and therefore I'm gonna short it or it failed to make a new low and therefore it's gonna hold, I'm gonna buy it. I don't look at stocks that way. I read stocks based on price action and the gaps. And the way I read this is a gap up the fail but I wouldn't have bought this gap up. It wouldn't have rated good to go long but I'm not shorting it, okay? I'm not shorting it. Do you understand? This is the buy point here. Follow through a continuation from the bullish gap if you wanna do it. You could have rated this gap here because it was a gap down. Although I don't know what it would have rated. I didn't do it but this was a valid gap to rate on the day as a short. It was a gap down. I wouldn't have known what it would have rated until I would have gone back and rated it and I didn't do it this day but it was valid to rate, okay? Without rating it, I don't know if I would have shorted it but if it rated 20 points or more, you could have. That I couldn't fault anyone for or the gap down here. Again, have to rate it but just saying because suddenly fails to make a new high, you short it, doesn't work for the long term or the short term. It's not about looking at something and saying was it red or was it green. I could look at 10,000 bars in a day and go back and say, well, if I bought this here I would have made a million dollars and if I shorted this here, I would have made a trillion dollars. That's not where the consistency comes from. To make money, Monday, Tuesday, Wednesday, Thursday, Friday and risk $1,000 or $1,500 in a train which is what I'm risking in some of my trains. You have to have 100% conviction. I don't have 100% conviction that I take a trade and I short something because it doesn't make a new high. That is not what allows me to take the trade in a whopping position at 9.35 and a one minute chart some days and put it in a stock with, you know, five, 4,000, 5,000 shares. The mechanism that I knew to determine what to do is based on institutional positioning. Institutions are buying Facebook. It is higher. It will make a brand new opt-in high again this year. Next target's 120, 125. Could have been get there before the earnings are into the earnings. Well, actually the earnings are April 27th so it's got about two and a half weeks to go. And this could break this area and still continue higher but it probably holds. It probably holds in here actually between now and the earnings unless the market falls off a planet which I don't see happening. This is one of the strongest things out there in the market. If you paid me a million dollars, I wouldn't short it even as a day trade. All right, so lesson for today is what is the strategy? Just because something fails to make a new high, that's not a strategy. You can look for a setup in something but it's still got to be a good short or good long. And just because something fails to make a new high doesn't mean it's a short. Same thing in the flip side, okay. And again, in my world, the only strategy that really you can read anything with any level of consistency to make money as a day trader or over nights or options or anything is gaps because it's an event in the chart. Is it an event in the chart that's playable? Either yes or no. What tells you about the rating system? So anyways, that's my two cents on that. It's for Herman. Have a great day, Herman. Good luck with Facebook, whatever happens. Email me at Melissa, thestockswitch.com if you'd like more information and the classes this weekend, April 16th and 17th. A good time to trade before earnings season which has started this week and obviously has started. Have a great day, everyone.