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Category Archives: Amazon

Amazon Crash Update

 

 

The stock that investors once loved has now crashed since the August 2018 peak. There may be an expanded pattern with this top, but for now, I will leave it out for now but a 5 wave sequence has started, which would be 5 waves down in Minor degree. I will have to adjust later but in the end, this AMZN crash is far from over. Over $119 billion has gone up in smoke, chopping the elephant down in size a bit. Buying on the “Dip”?  Ok, that sounds like fun! AMZN could get cut in 1/2 again before any real bottom may present itself.  The world is slowing down as a potential recession is heading our way.  We might not see a large counter-rally until the media pumps out the bearish news. This could all remain bearish for the rest of the year, but eventually, we should also get a Primary degree counter rally within the next 4 years. The trend is obviously down as buyers are no longer in love with Amazon.

This is not some little correction in a bull market but it is the start of a huge bear market that only a few have been warning us about. If anything then  AMZN might become a “Buy”, once Solar Cycle #25 has arrived. AMZN sure charged up with Solar Cycle #24, so I expect the same to happen again.

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Amazon When will It Crash And Burn?

A person can waste a lot of time and money trying to short Amazon as it just refuses to die. It will never stay up as we are going into a deflationary crash the likes we haven’t see since the 2008 crash. I would be going for a Cycle degree wave three top in Amazon as well.  It does not take rocket science to know what Amazon sells is commodaty related and depends entirely on the consumer keeping up their spending habits . Shop till you drop seems to the magic word for AMZN.

At $1858 as the top so far, Amazon would have to drop like a rock. Any larger drop would sign it’s death warrnt!  Look at the gap at $1000 so that be one small area for a bounce.

The gold/Amzn ratio also hit its highest today with a 1.49:1 ratio. The most expensive all year so far.

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Quick Amazon Stock Chart Review

When you see someone try to wave count Facebook in great detail, then  you will find someone with too much time on their hands.  I try to stay away from all single stock wave counts, but it’s nice to record a potential wave 3 top in Cycle degree. FB is done for, as far as I’m concerned,  as the age of the internet is in an, s curve plateau. Two trend lines can give us a clue how deep FB can crash in the impending Cycle degree bear market.  The standard correction for a big bear market could be a 70-80% retracement.

It’s the top trend line that is important as that shows a long steady climb. That top line is duplicated in parallel fashion and then dragged down to the bottom.  This points to the $100 price level.  Face Book is in such a bubble that it may burst and never rise again. FB will become an electronic burial ground for all the dying boomers as deleting your own account after you die is very hard todo.  Dead people do not pay  ad revenues the last time I checked, unless you become an AI vertual robot and live on forever.

Folks, we are coming into a time where all asset classes are going to have convulsions so large that “Buy&Hold” will no longer work for the next three years. There is a time to buy and there is a time to run to the hills and hunker down. Wait out the financial storm that will hit us, as this planet will be forced to de-leverage.

To show how expensive FB is to gold I have calculation when it was cheap at 100:1. Yes, with one ounce of gold you could buy 100 shares back in 2012. Now you can only buy 6.44 shares with one ounce of gold. This is the most extreme Gold/FB ratio I have ever recorded, and blows all previous cheap ratios out of the water.

As you can guess, I’m very bearish on the markets and FB is just another elephant in a china shop.  The Buy&Hold strategy is dead, for the next 3 years as even “value” investors are having a hard time in finding “value”.  Being bullish in the biggest bull market in history puts you inside the bubble. Bubble players don’t think they are in a bubble, so they will go down once the markets hit another iceberg.

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Amazon: Price Still Heading To The Moon

It seems Amazon is impervious to any meaningful price correction. The record high so far has hit $1724 and has backed off a bit last week. Sure I would love to see a good correction as I think its high time for one to happen. We also know that any extreme can keep on pushing higher until another new extreme is reached. This extreme may be a Cycle degree top , but I will stay away from any huge moves until it happens. AMZN could just keep on bumping and grinding along, until some fundamental catalyst sets if off.   President Trump ‘s trade war may have unsuspecting consequences on Amazon.

Only the rich can play this Amazon game as average Joe can’t afford enough stocks to make a difference. If he does, then wouldn’t it be smart to sell high priced stocks to those rich people that can afford them. Buying from the poor and then selling to the rich is what buying low and selling high is all about. 😛

My top trend line might have more meaning than the bottom trend line has, but if a Cycle degree correction is coming then the bottom trend line may not hold.

There are a few stocks like Amazon, Apple, Tesla that seem to defy gravity and they need to get hit hard once the Nasdaq bubble starts to burst.

Back in April 2018, I show the  Gold/Amzn ratio hit 1.09:1, today this ratio is now 1.34:1. It now takes 1.34 gold ounces to buy just one Amazon stock which should also establish another new Gold/Amazon ratio extreme.

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Amazon Bull Trap?

 

This Amazon bull market can’t last forever, but it sure looks like it will keep soaring to the heavens, after all they are crushing brick and mortar stores consistently. I guess AMZN investors never heard about the trade wars that may be starting or is Amazon impervious to any trade war or recession?  The move in 2007, to late 2008 is a potential wave 3-4 in Primary degree, and what followed fits better into a diagonal wave count, but I have been using the simple count at this time.

If you notice how the horizontal lines get smaller as the bull market keeps running, then we know that just a little correction can send Amazon crashing hundreds of dollars in a very short distance. Just to get to the bottom trend line Amazon would hit the $600 price level.

One of the expensive Gold/AMZN ratios back in July 2017 was 1.16 and today we have about a 1.2:1 ratio. One ounce of gold will only buy 1.2 shares of  Amazon. I measured a cheap ratio of 25:1 at the 2002 bottom so I doubt we will ever see that ratio again. Amazon would vanish before that crazy low ratio will get hit again. In todays world anything can happen, so I never rule out anything even a 25:1 ratio.

We seem to be heading into a brick wall with our present ratios, and more than just a few times, so this can be a very bearish sign for Amazon.

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Amazon 2002-2017 Elliott Wave Count Review

I normally do not do wave counts on single stocks, but there are a few that are being held by many institutions, hedge funds and that have a broad exposure to the economy.  It can take a very long time following a stock, before any decent wave count can be used or even be reliable in anything more than a short term trade setup. 

When I saw this bull market it didn’t take long to see a pattern I could try. Once we match up the 2002 bottom, with the stock market bottom of late 2002, we can see two sets of corrections. The first correction being a wave 4 in Minor degree, followed by the 4th wave, in Intermediate degree. This Intermediate degree 4th wave correction was a flat, (3-3-5) falling back to the previous 4th wave of one lesser degree, which was Minor degree. 

I kept the 5th wave very simple, but in reality it fits much better as a diagonal 5th wave. 

  The last recorded high was $1017 with a very small inverted zigzag rolling around the top. The Gold/Amzn ratio hit about 1.6:1 which means you can only buy, 1.6 shares with one US gold ounce.  This ratio would have to compress even more, if the bullish phase is still going to extend much longer. Back down in 2002 when Amazon was a bit below $13, this Gold/Amzn ratio was about 25:1. Will it reach that ratio again? I have my doubts, but we have a target ratio that we can use for now.

There is a very high probability that Amazon is at a Cycle degree wave 3 peak as well, so this stock could fall much further than what the majority might be expecting. The Amazon bull market is also riddled with gaps, so I would expect that most of the high gaps still open, will get closed. I have about 5 open gaps below present prices, which seems to jump $200 at a time. Gaps at $600, $400, $200, $100 and one at $50, all can become strong turning  points. I think we can forget about the $50 gap, as the $200 price level is already below the start of the stock mania in 2011. 

The two parallel trend lines follow the Intermediate degree trend, so we should get a correction at least one higher degree, or even two degrees higher. Two degrees higher will mean a Cycle degree correction, with 3 waves in Primary degree.  

Amazon is getting too big and the government is talking about it – MarketWatch

I thought I would add this link as it also mentions Steven Jon Kaplan!

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Updated August, 2, 2017

 

This is a 10 day range of Amazon, including a spike to new record highs, after which it immediately started heading south.  It looks great as a start of another correction and I’m sure some bulls will try and buy on the dips, but he dips are going to much bigger than what the majority thinks. We could be heading to an Amzon bear market that may take 2-3 years to play out.

Just go back 8 years, and you will see many open gaps, right down to the $100 and even $50 price levels. You might not see these gaps on a weekly time scale, but we sure can see these gaps at the daily time scale. From the late 2008 bottom,  I counted about 6 open gaps, so any single gap can become a temporary stop.  The Gold/Amazon ratio also pushed 1.18 when I measured it today. This means that one gold Troy ounce will only buy 1.18 shares of AMZN. In the days when AMZN was cheap, you could buy 25 shares of AMZN with one ounce of gold. It would not surprise me if AMZN closed the gap at the $300 price level, but even then the $300 price level may not hold for long.

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