AMZN – Amazon (Last:571.78)

The futures never quite made it to the 1951.00 Hidden Pivot rally target where we’d sought to get short yesterday. However, that is not to say that the plunge that ensued from the actual high, 1946.50, was not telegraphed with sufficient clarity to inspire a little boldness in bears. To wit, we took note in the chat room early Wednesday morning of AMZN’s reluctance to get in bullish gear. At the opening bell the stock was down about $9 with the broad averages in a weak bull-trap short-squeeze.  When AMZN fell a further $10 in the next hour, however, the game was up for bulls. The stock had been off as much as $36 by day’s end — a 5.8% plunge that was more than two-and-a-half times as severe in percentage terms as the Dow’s dive.

AMZN was due for a bounce at yesterday’s lows, since the bottom occurred just inches from a key midpoint Hidden Pivot at 577.06. But if it gives way easily Thursday morning, brace for a plunge to at least p2=552.59, or even 528.12 if any lower. Traders should look for potential opportunities using the pivots shown in the chart and this sequence: 1) bottom-fish p with a very tight stop-loss; 2) get short at p ‘mechanically; 3) cover short partially, or bottom-fish at p2, substituting camouflage for the $8+ ‘mechanical’ stop-loss; 4) short p2 ‘mechanically’, stop 560.74; 4) cover short and/or go long at 528.12. ______ UPDATE (January 14, 9:17 p.m.): The short squeeze off yesterday’s bear-trap, opening-bar low amounted to $32.  Impressive, but it doesn’t negate the fact that the bottom occurred fully $7 beneath the $577 pivot noted above. This is bearish price action, and we should therefore view the rally with skepticism. Look for it to fail at the midpoint pivot of whatever minor abc pattern unfolds from here. _______ UPDATE (January 20, 10:46 a.m EST):  I’m looking for a turn from 546.14, based on a lesser pattern than the one yielding the 528.12 target noted above. I evidently flagged the higher target during the last impromptu session, since the target is ‘painted’ on an hourly chart that I’d overlooked this morning._______ UPDATE (10:30 p.m. EST): The 546.14 target noted above came within $1 of nailing the low of Wednesday’s $27 dive. The subsequent $31 bounce could have produced spectacular gains for anyone who got long. Some subscribers did, including one who reported buying call options at the 550 strike for 10.80 and selling them later in the day for $20.