AMZN and the Nasdaq high-fliers got schmeissed Thursday, even as Dow stocks remained buoyant all day long. Is this a new dynamic that we are likely to see more of? My guess is yes, that it represents the impending flow of capital out of the likes of Facebook and Google, which are just glorified ad agencies, and hyper-bloated gas-bags like Twitter, Uber, and LinkedIn; and into the shares of companies that produce real things, such as Kiewit (KIRY), U.S. Steel (X), Cemex (CX) and Caterpillar (CAT). I don’t put Amazon in the gas-bags category because much of its growth requires brick-and-mortar investment, which creates true wealth, as opposed to the kind of wealth vested in insider shares held by Silicon Valley millionaires and billionaires. I don’t mean to suggest that purveyors of online airware are going to die on the vine — only that they are about to share Wall Street’s booty on a more rational basis.
AMZN will remain a key bellwether for U.S. stocks in any event. At the moment, it looks not so much beleaguered as it does a victim of engineered mark-downs by institutional investors who would be thrilled to buy more of it at significantly lower prices. The chart (see inset) shows a pathway down to 686.94, a fall of about 7% from Thursday’s close. The target will remain valid as long as its point ‘c’ high at 748.93 is not exceeded first. ‘Mechanical’ shorts from either the green or red line will likely work best if these Hidden Pivot levels are put in play no later than an hour into Friday regular session.