Guess Which Stock Is on a Rampage...

AMZN has taken a big leap in after-hours trading, impelled by an announcement from Jeff Bezos that Prime membership recently exceeded the 100 million mark. Remember when McDonald’s sold its hundred-millionth hamburger?  Who knew that that number would eventually pale in comparison to the countless billions of burgers Mickey D would sell in the years and decades that followed?  Amazon would seem to be on the same track, destined to have every man, woman and child on Earth enrolled as a paid Prime member. Speaking as one myself, I’d rate it one of the best values out there.  I use the service so intensively, most particularly for free shipping, that I can’t fathom how Bezos makes money on me. Maybe he isn’t — that, as the old joke goes, he loses a little bit on each transaction but makes up for it with…volume!

The stock is currently trading $48 above Wednesday’sclosing price, which was $24 above Tuesday’s closing price. Although the rally seems likely to adrenalize the broad averages, it raises serious doubts about whether they can keep up with the steep pitch of AMZN’s frequent wilding sprees.  Probably not.  But as I have continued to emphasize, the stock market can do no worse than move sideways as long as the shares of the world’s most economically important company are moving higher.  Most immediately, if AMZN can exceed the 1576.65 peak labeled in the chart, it will shorten the odds of a further rally to new all-time highs. Actually, my minimum upside target at the moment, based on the Hidden Pivot Method, is actually higher than that: 1592.23. (Bulletin: Pivoteers may notice that the stock generated a ‘mechanical’ buy signal moments ago with a swoon to the green line.) I am skeptical that this kind of craziness can continue for much longer, and that is why I will continue to monitor AMZN’s intraday charts for signs of a top. As should be obvious, every bear market in history has begun with a tiny, downtrending abc pattern on the one-minute chart.