With AMZN (Amazon.com) earnings not only out of the way but the alternative scenario posted before the stock reported earnings yesterday (first chart below), as the last of the 5 mega-top heavy FAAMG stocks to report this quarter, that now leaves no unfinished business behind & should soon allow the market to decide if it wants to take another major leg down in the coming weeks+ as I still favor.
AMZN weekly 3 Feb 3rd
On the updated chart below, which includes the after-hours session trades following the earnings report yesterday, you can see that AMZN made a near-perfect backtest of the trendline which was highlighted as one of the two most likely scenarios for the stock following earnings. As I often talk about how the initial pop or drop following earnings is often an over-reaction that is soon faded, AMZN surged 18% in the after-hours session immediately following the release & has already dropped nearly 9% into this morning’s low from that initial reaction high. Additionally, QQQ & /NQ rallied over 2% in the AH session due to Amazon’s surge & have since fallen as much as 3% into this morning’s lows so far…. another example of why not to read too much into the initial reaction from a market-moving stock’s earnings report.
AMZN weekly Feb 4th
Essentially, a break below the recent lows will add another major checkmark to the bearish case, increasing the odds of my next downside targets on the major stock indexes being hit in the coming days to weeks.