There’s just one important event on the economic calendar this week: AMZN earnings due out after the close on Thursday. The ‘experts’ are predicting $1.27 per share, but we know enough not to care whether the retailer beats their dart-board forecasts or not. Far more important is whether the lunatic juices are flowing on Wall Street at the moment the earnings are announced. The Street’s state of mind is unpredictable, of course, but we’ll nevertheless be able to get a good ‘read’ on AMZN based on how it reacts to the news. If the stock pushes above the two peaks shown, the higher of which lies at 1590.00, that would be bullish for the stock market as a whole, since AMZN is by far the most important bellwether for U.S. economic activity. Alternatively, if AMZN fails to exceed both peaks this week, that would be quite bearish for stocks. It’s that simple.
Thursday Is the Big DayPosted Sunday, April 22 0 comments
$CRSP – CRISPR Therapeutics (Last:54.01)Posted April 22, 2018, 5:08 pm
$AMZN – Amazon (Last:1527.50)Posted April 22, 2018, 5:04 pm
AMZN has taken a big leap in after-hours trading, impelled by an announcement from Jeff Bezos that Prime membership recently exceeded 100 million. Remember when McDonald’s sold its hundred-millionth hamburger? Who knew that that number would eventually pale in comparison to the countless billions of burgers Mickey D would sell in the years and decades that followed? Amazon would seem to be on the same track, destined to have every man, woman and child on Earth enrolled as a paid Prime member. Speaking as one myself, I’d rate it one of the best values out there. I use the service so intensively, most particularly for free shipping, that I can’t fathom how Bezos makes money on me. Maybe he isn’t — that, as the old joke goes, he loses a little bit on each transaction but makes up for it with…volume!
The stock is currently trading $48 above Wednesday’s closing price, which was $24 above Tuesday’s closing price. Although the rally seems likely to adrenalize the broad averages, it raises serious doubts about whether the stock market can keep up with with AMZN’s not infrequent wilding sprees. Probably not. But as I have continued to emphasize, the stock market can do no worse than move sideways as long as the shares of the world’s most economically important company are moving higher. Most immediately, if AMZN can exceed the 1576.65 peak labeled in the chart, it will shorten the odds of a further rally to new all-time highs. In fact, my minimum upside target at the moment, based on the Hidden Pivot Method, is actually higher than that: 1592.23. (Bulletin: Pivoteers may notice that the stock generated a ‘mechanical’ buy signal moments ago with a swoon to the green line.) I am skeptical that this kind of craziness can continue for much longer, and that is why I will be monitoring AMZN’s technical vital signs closely for subtle evidence of a top. It is a truism that every bear market has begun with a tiny, downtrending abc pattern on the one-minute chart. As long as we stay focused on the lesser charts, we cannot be fooled for long, nor are we likely to get trapped when They finally pull the plug._______ UPDATE (April 19, 6:07 p.m. EDT): AMZN’s canny sponsors opened the stock on a short-squeeze gap that peaked at 1568.52, an inch shy of the 1576.65 benchmark flagged above. The pullback was shallow, so we should expect another attempt overnight or on Friday.________ UPDATE (April 22, 5:04 p.m.) Buyers spent the week lazily building a modest hump atop the 1528 midpoint Hidden Pivot shown. This is bullish, but not very. Although it has put the pattern’s 1704.49 target theoretically in play, the implication is that AMZN will be in no hurry to get there. A pullback to the green line (1440.78) would trip a mechanical buy signal, but we’ll wait until it happens before we decide how to leverage it.
$ESM18 – June E-Mini S&P (Last:2693.25)Posted April 19, 2018, 7:03 pm
$DJIA – Dow Industrial Average (Last:24,664)Posted April 15, 2018, 5:05 pm
Bulls gave back 25% of Thursday’s substantial gains in the final minutes of the session, presumably to preserve some buying power for Friday. A robust surge would hit the 24,837 [corrected] rally target of the pattern shown, but buyers will have to do a little better than that to leave themselves in good shape for next week. Specifically, they’ll need to surpass the 24,977 ‘external’ peak to remain in command Sunday evening. It lies exactly 494 points above and is crucial to the health of the intraday charts. If the Indoos were to close above the peak ahead of the weekend, that would add to a picture of short-term strength. But you should set a screen alert at 25,449, where an even more important peak was recorded nine days earlier. It is the most significant supply obstacle the Dow will have faced since the initial bounce off early February’s lows. ______ UPDATE (April 15, 5;08 p.m. EDT): Last week’s tedium changed nothing in the analysis given above, although I’ll mention that a pullback to the green line (24,012) would trip a ‘mechanical’ buy signal. Traders keen on leveraging it can interpolate using DIA. (Please note that the 24,837 target given above corrects a 50-point error.)_______ UPDATE (April 16, 5:25 p.m.): Today’s 200-point rally was most unimpressive, since there were no significant obstacles in its path. Let’s see how well buyers handle the two impediments shown in this chart. _______ UPDATE (April 17, 11:22 p.m.): Today’s equally unimpressive 213-point rally topped a millimeter from the lower target, 24837, so the jury is still out. _______ UPDATE (April 19, 7:22 p.m.): If the Indoos continue their retreat from Tuesday’s high, expect them to fall to at least 24,042, a crystal-clear midpoint support. If this occurs early in the session, don’t hesitate to bottom-fish using DIA calls or stock. The equivalent target is 240.26.
$GCM18 – June Gold (Last:1337.60)Posted April 15, 2018, 5:04 pm
$BRTI – CME Bitcoin Index (Last:8827)Posted April 1, 2018, 5:05 pm
I stopped covering bitcoin a couple of months ago simply because it became boring. The wild swings of yore made it fun to trade for a while, and subscribers may recall that we did pretty good at it. But bitcoin has settled into a rut, bringing out the worst in those who once adored it; now they delight in kicking it while it’s down. A recent headline at Bloomberg.com captured their feisty turn toward disrespect: Bitcoin Is Worthless, Bubble May Pop Soon, Allianz Global Says. And here’s another, from a seer who discerns only dark clouds on the horizon: Bitcoin’s ‘Death Cross’ Looms as Strategist Eyes $2,800 Level. I could make a technical case for $1800 myself, and it wouldn’t surprise me if the eventual bottom is even lower than that. But why bother? It’d just be an educated guess, and no one would trade it anyway. But let me be clear: I am not looking for bitcoin’s demise, but rather for a second-wind rally that eclipses the old highs. In the meantime, cryptocurrency’s flights of fancy will be subdued and limited, mainly because of the heavy losses suffered by hoards of amateurs, dabblers and other speculators, particularly early adopters. In at prices below $500, they figured they couldn’t lose when the ‘cryptos’ soared above $10,000. Some bought more bitcoin on the way up and at its heights. It is the very real damage they suffered on the way back down to $5900 that is weighing on bitcoin at the moment and which will continue to hold bulls in check. ________ UPDATE (April 1, 5:08 p.m. EDT): Bitcoin has been bound for the $4509 target since January, notwithstanding the powerful bull-trap rally in February. I wouldn’t touch it till it gets down there. _______ UPDATE (April 3, 7:12 p.m.): How high would $BRTI need to rally to warrant our serious attention? Answer: To 9885, just above a peak recorded March 12 on the way down. _______ UPDATE (April 19, 9:56 p.m.): Just as I was about to remove waaaay-too-boring bitcoin from the touts list, I noticed that $BRTI is in a no-brainer rally to exactly 8854.66. One other thing to notice is that the stock could have been bought ‘mechanically’ on either of two pullbacks to the green line. Sorry for falling asleep at the wheel, but that doesn’t mean you can’t still paper-trade this one, especially if you need convincing that certain ‘mechanical’ trades can yield a significant edge. ________UPDATE (April 22, 9:26 p.m.): Surprise surprise. BRTI opened on a short-squeeze gap Sunday that hit 8964, 110 points above our target. Since then BRTI has oscillated above and below the target, slavishly returning to it as buyers impatiently await fresh inspiration.
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