Tuesday, February 26, 2013

We like Amazon shares as much as the next guy, although we're not too keen on what the retail landscape is going to look like in a decade, when this company has finally succeeded in destroying all competition.  So what is the stock up to as the broad averages continue to show signs of a major topping process?  The picture-perfect pattern shown implies that a fall of at least $15, or 5.7 percent, over the near-term is very likely if p is beached decisively. Traders should position from the short side on a breach of the 259.75 midpoint. It was penetrated by a dime at yesterday's low, but that is not yet enough for us to infer that a further fall to its 'D sibling, 245.21, is a done deal.  That last number will of course be a good place to try bottom-fishing with a very tight stop-loss, regardless of what our expectations are at the time for the broad averages. _______ UPDATE (2:16 p.m. EST):  Chat-roomers appear to be taking shots at getting short in this stock today, but the recommendation above wasn't meant to be implemented in shoot-from-the-hip fashion.  To give you an idea of how subtle an entry opportunity you should be looking for, and to allow you to determine whether your technique is up to speed, here is the first short I was able to find that was signaled on the one-minute chart via a pattern that meets all of our rules: A=259.19 at 11:00 a.m. EST; B=257.36 at 11:09 a.m.; and C=258.10 at 11:10 a.m.

A very tight stop prevented our shorting the high that preceded yesterday's $8 plunge, but there is no way I would have risked an open-ended short based on information sent out the night before.  In retrospect, it seems inevitable that the best short you could have asked for in this stock would come off a gap-up opening that should have scared the hell out of anyone standing in its way.  In these situations, camouflageurs should reflect on the fact that the camo technique is perfectly suited to the task of extracting opportunity from the panic and fear of others. I have reproduced a one-minute chart that shows a 'camo' pattern that meets all of our rules and which could have been shorted with a minimum of risk and stress. Isn't time you learned the amazing secrets of Camouflage Trading?  If you've been struggling for years to trade profitably, click here to change your life.

Now we're supposed to believe that U.S. stocks dropped yesterday because Wall Street was somehow "concerned" about Italy's election results. The stock market hasn't been much concerned about anything for four years, so why start now?  Whatever the case, the mainstream media, wrong about nearly everything, is saying that Italian voters' implicit rebellion against the status quo is weighing on U.S. stocks. I'd prefer to think the market plunged yesterday because it was up on Friday, and because violent intraday swings will remain the norm until the topping process is complete.  As I've been shouting here for weeks, this is a perfect place for a major top to occur, not only because there's a cluster of important Hidden Pivot targets at or very near current levels, but because Obamacare is about to crush the life from a painfully narrow recovery that was already starting to sputter out.  And let's not forget that there was that fabulous rally in January -- the kind of bull-trap hubris that the mainstream media loves to run with. We may find out soon just how high TBTB can pile manure.

Some genius bought $90,000 worth of out-of-the-money calls on Heinz shares a day before Buffett tendered for the company, but it looks like he won’t get to collect a dime of the $1.7 million profit the trade produced.  Actually, the trader is a fugitive from justice at the moment, having failed to show up at an SEC hearing last week to explain his astoundingly good timing.  Don’t these guys ever learn?  Buying call options to profit from insider information is like wearing a mechanical holdout device to a card game.  If and when you get caught, which you will, there’s no way to lie your way out of it.  Why do you think the SEC is so keen on prosecuting insider-trading cases?  Convictions come as easy as shooting fish in a barrel, since the paper trail in nearly every instance is so clear and detailed that the trader might as well have presented regulators with a scrapbook celebrating his crime. This perp reportedly bought the call options through a Swiss account managed by Goldman, so he’s not exactly your average Joe. Goldman claims they don’t have “direct access” to his name, and at this point even the regulators don’t know who he is. But you can bet they’ll collar him eventually, notwithstanding Switzerland’s zeal for protecting the identity of its banking customers, even those who deposit such large sums that the money could only have been stolen. When it comes time for the Swiss to do the right thing, we’re betting they’ll cough up the trader’s identity so that the SEC’s investigators can rack up another score. Switzerland No Place to Hide As a put-and-call dealer on the Pacific Exchange years ago, we ourselves were the prey of inside traders operating through brokerage accounts in Switzerland, Jordan, Saudi Arabia and