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April 26, 2018 | Attitude, Not Earnings, Are Driving the Madness in AMZN

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Several days ago, I wrote here that AMZN’s reaction to earnings released after Thursday’s close would determine whether the bull market, now in its 111th month, would live or die. The key test was whether the stock could get past two important peaks on the daily chart. It did so with ease when the news came out, exceeding not only those peaks, the higher of which lay at 1576, but the old record high at 1617. My latest analysis says that AMZN, which has traded as high as 1641 this afternoon, could go on to hit 1699.04 (or alternatively 1704.49). If so, we should be prepared for the possibility that this will be a bull trap, the deceptive last gasp of a bull market that long ago exceeded the bounds of economic reality.  The market in any event is incapable of keeping up with a stock driven by madness. Moreover, AMZN itself has been trading at around 250 times earnings — a tad rich for DaBoyz to be fattening it up even more with manic short-squeeze rallies like today’s.

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April 26th, 2018

Posted In: Rick's Picks

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