The pop artist's latest album release highlights fierce competition for online music sales between Amazon and Apple: Most tech stock investors have heard about the Amazon/Gaga stunt -- meant as high-powered ammo in the digital music "cloud war."
So why do our technical analysts actively avoid fundamental explanations for market movements?
The Elliott Wave Principle posits that fractal patterns govern the markets (and broadly-traded stocks), down to the one-minute chart. These patterns typically unfold in 5 wave and 3 wave structures, no matter what the business news includes.
Yes, the Amazon/Apple rivalry is hot today, but two weeks ago (when seasoned analyst Ron Feinstein identified a beautiful pattern in Amazon stock) the media was concerned with Amazon vs. Barnes & Noble. In June there will no doubt be a new headline to influence fundamental investors.
Check out what Ron Feinstein posted 2 weeks ago when he recognized the tiniest 5-wave decline on the one-minute chart.
The suggested entry yesterday was early but the stop was well placed to allow for a nominal new high which [arrived]. The 1 minute chart presented shows a clear five wave decline which is either the beginning of a larger correction or the end of a smaller one. Ideally prices will not rebound past the 62% retracement around 205 and not rally impulsively. Lower the stop to 206.54.
Then he looked at the Phi retracement (on his Tablet PC? His iPad? Doesn't matter). The next chart shows Amazon a couple hours later, and Feinstein's comment that it reached the .618 retracement at 205 and change:
The retracement started off in line with expectations but has morphed into something more complex. The structure does not have an impulsive "look" to it and prices traded within 2 cents of the 62% retracement at 205 but the day is far from over. This Flash really needs to see prices fall below today's low. Lower the stop to 206.53.
The subsequent action has allowed him to adjust his stops, and our third chart shows Amazon action a couple of days later as it gapped lower:
The intra-day analysis on Friday was virtually 'textbook' and the market is so far continuing to oblige. Today's gap down should ideally mark some kind of third wave down but we need to see continuation. Lower the stop to 205.05 as there is still no confirmation of a top.
In this example from Amazon, you can see the fractal nature of the charts, with the same Elliott Wave pattern working in multiple time frames. Regardless of the day's news, EWI posits that stock market patterns are "born this way," namely independently of the fundamentals.
No matter what's in the business papers, stock market patterns like this unfold according to the Elliott Wave Principle. Although this Amazon FLASH recently closed, you can access our expert's ongoing analysis to help you identify future market patterns.
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