One of the ideas I teach in the Hidden Pivot Webinar is that when beautiful rally patterns don’t work, you should take it as a sign that the trend is about to go the other way. This could happen shortly in AMZN, which ended the day with a fetching ‘counterintuitive’ buy signal on a rally to the green line. Without going into the proprietary details that define this type of trade, I’ll mention that the pattern shown looks like an almost certain winner for anyone who got long at 563.67. Which is to say, odds of a further rally to at least p=571.79 are at least 70%. But the stock looked so heavy on Monday that I’ll suggest passing up the trade and simply observing. If the stock takes out the 555.55 low without having hit the red line, it would be warning not only of more weakness in Amazon, but also of a potentially sharp decline in the broad averages. ________ UPDATE (March 8, 3:48 p.m. ET): The 571.59 target noted above missed the top of Amazon’s $17 rally by just 34 cents. Shorting there could have been worth as much as $1000 per round lot, since the stock subsequently fell to 561.50. If you took the trade, use your profits to cushion a 555.54 stop-loss below a ‘mechanical’ bid of 563.67 or less. Price objective: 588.04. _______ UPDATE (7:53 p.m): No change. If AMZN takes out the 555.55 low, it could turn the tide in favor of bears, sending the broad averages sharply lower. My target for the stock would be 546.95, subject to a potentially tradable bounce from 553.05. (30-minute, a=579.95 on 3/4). _______ UPDATE (March 9, 8:56 p.m.): The stock opened on a gap below 555.55, implying that more selling, possibly gaining in momentum, lies ahead. _______ UPDATE (March 10, 10:28 a.m.): DaBoyz short-squeezed the stock on the opening bar to 567.00 — a gain of more than $7 over Wednesday’s close. However, even on the lowly 15-minute chart, the move surpassed zero previous ‘external’ peaks. That would take a further surge exceeding 571.35.
