AMZN Amazon - Realistic Expectations In Both Doom and Gloom
Updated
Something I am aware of is that traders get trapped primarily because they get laser focused on one specific side of the market and one specific price target. This happens either because of greed in wanting to get it allllllll from a winning position or simply being caught underwater.
Amazon, a formerly $1+ trillion company by market cap, lost 30% of its value in the course of literally two weeks, but yet, still does not count as "cheap."
Weekly https://www.tradingview.com/x/rmyldhrH/
At $91, this thing is still pushing a $982 billion market cap, and this is a company that more or less exists as a cesspool of fake Chinese product reviews and as a western import hub for junk effectively siphoned from the Chinese Communist Party's Aliexpress.
Looking at the monthly, after two years of post-Coronavirus Disease 2019 distribution, nobody in their right minds should be bullish on Amazon.
It's no longer a buy, it's a sell, and has been all year.
It's not that Amazon is a bad company, it's that the market structure clearly seeks to drain all that coiled tension from two years of selling inside a (relatively) narrow range.
But that being said, you can also tell from the monthly that there's huge ranges playing out while it makes its way downwards. The monthly also shows that Amazon is trading at a deep discount level of its total COVID-era structure.
While it could run from here and take out the lows with great ease, or run towards them another 10% and double bottom, I feel it isn't likely to play out so easily for bears, who already just had a big meal, and should not be overly greedy.
When we look at the Daily, it gives us a lot more perspective and some things to be realistic about.
Namely, the September gap is above equilibrium and counts as a breakaway. Amazon will trade back there one day, but only after the market operator has achieved its downside objective, for it already played with equilibrium twice and had no interest in filling the gap.
But Amazon lost almost $20 on its earnings call to end October, and then bounced hard before proceeding to lose another $10 in short order.
The notions of "oversold" and "overbought" shouldn't be measured in terms of indicators, for those are just math-based lagging lines. Overbought and oversold should be measured based on price action, for in reality, when the trading desk at JP Morgan and Citadel sit down in the morning, they're looking at dollar values, just like you are.
"How much do I have to spend? How much can I make? How much do I stand to lose?"
But unlike you, they aren't looking at trendline astrology or squiggle lines and Elliot wave superstitions, because when it comes to taking risk and calculating for potential reward, if you lose, you can't really tell your shareholders things like "But meh Williams %R hit 42 while the wave count was a 16(a)(c)42. I don't know what went wrong!"
Based on today's overall wild price action it seems that indexes are poised to stop trying to make lows and rally. This is congruent with the timing we face, with the US midterms being Tuesday of next week and CPI printing on Thursday.
During today's manipulation, Amazon also made three consecutive hourly lows before finally pivoting. This should indicate the operators will seek short term upside.
What's good in this trade is a most conservative upside target is 10%, slightly over $100. Yet, if Nasdaq rips even 60 or 70% as hard as the Dow just did, upside targets in the $107 range are likely to be fulfilled.
If Nasdaq really goes crazy bull trap to sucker in retail and gamma squeeze, then $120 is on the table.
These are big opportunities one can take advantage of, but it's hard to take advantage of them if one has their eyes on the $81.30 COVID low because Fintwitt, your signal service Discord, some guy with a Pepe avatar who claims he worked for Goldman Sachs in 1997, etc., are screaming about recession and the Federal Reserve not pivoting.
Amazon, a formerly $1+ trillion company by market cap, lost 30% of its value in the course of literally two weeks, but yet, still does not count as "cheap."
Weekly https://www.tradingview.com/x/rmyldhrH/
At $91, this thing is still pushing a $982 billion market cap, and this is a company that more or less exists as a cesspool of fake Chinese product reviews and as a western import hub for junk effectively siphoned from the Chinese Communist Party's Aliexpress.
Looking at the monthly, after two years of post-Coronavirus Disease 2019 distribution, nobody in their right minds should be bullish on Amazon.
It's no longer a buy, it's a sell, and has been all year.
It's not that Amazon is a bad company, it's that the market structure clearly seeks to drain all that coiled tension from two years of selling inside a (relatively) narrow range.
But that being said, you can also tell from the monthly that there's huge ranges playing out while it makes its way downwards. The monthly also shows that Amazon is trading at a deep discount level of its total COVID-era structure.
While it could run from here and take out the lows with great ease, or run towards them another 10% and double bottom, I feel it isn't likely to play out so easily for bears, who already just had a big meal, and should not be overly greedy.
When we look at the Daily, it gives us a lot more perspective and some things to be realistic about.
Namely, the September gap is above equilibrium and counts as a breakaway. Amazon will trade back there one day, but only after the market operator has achieved its downside objective, for it already played with equilibrium twice and had no interest in filling the gap.
But Amazon lost almost $20 on its earnings call to end October, and then bounced hard before proceeding to lose another $10 in short order.
The notions of "oversold" and "overbought" shouldn't be measured in terms of indicators, for those are just math-based lagging lines. Overbought and oversold should be measured based on price action, for in reality, when the trading desk at JP Morgan and Citadel sit down in the morning, they're looking at dollar values, just like you are.
"How much do I have to spend? How much can I make? How much do I stand to lose?"
But unlike you, they aren't looking at trendline astrology or squiggle lines and Elliot wave superstitions, because when it comes to taking risk and calculating for potential reward, if you lose, you can't really tell your shareholders things like "But meh Williams %R hit 42 while the wave count was a 16(a)(c)42. I don't know what went wrong!"
Based on today's overall wild price action it seems that indexes are poised to stop trying to make lows and rally. This is congruent with the timing we face, with the US midterms being Tuesday of next week and CPI printing on Thursday.
During today's manipulation, Amazon also made three consecutive hourly lows before finally pivoting. This should indicate the operators will seek short term upside.
What's good in this trade is a most conservative upside target is 10%, slightly over $100. Yet, if Nasdaq rips even 60 or 70% as hard as the Dow just did, upside targets in the $107 range are likely to be fulfilled.
If Nasdaq really goes crazy bull trap to sucker in retail and gamma squeeze, then $120 is on the table.
These are big opportunities one can take advantage of, but it's hard to take advantage of them if one has their eyes on the $81.30 COVID low because Fintwitt, your signal service Discord, some guy with a Pepe avatar who claims he worked for Goldman Sachs in 1997, etc., are screaming about recession and the Federal Reserve not pivoting.
Note
There goes Amazon, notably taking out some highs using the CPI news as leverage.Yet it seems many things are simply going red.
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