Amazon missed. Ouch. I took a small but painful loss in Amazon. I should have sold before market close but I was gambling on an earnings and revenue beat even though, personally, I dropped Amazon Prime because they raised the price this year.

SPY had a big bounce and recouped a large percentage of Wednesday’s losses, before plunging lower into the close.

Daily chart of SPY:

1 minute chart of SPY:

Earnings season has been tough.

The market is still moving through this correction phase and with revenue slowing for even bell-whether stocks like AMZN, more and more traders are coming around to President Trump’s assessment that the Fed has lost its marbles. Personally, I see value coming back to markets but I don’t want to be long anything as this revaluation/correction phase plays itself out.

On the weekly chart of SPY we have a Bearish Belt Hold (black box around pattern below):

SPY Weekly chart with bearish belt hold pattern

Tomorrow is going to be a pivotal day to see if buyers step in off the weekly support level. It would be psychologically devastating for bulls if the bears are able to take the market back down to retest Wednesday’s lows.

Also we need to remember that a lower low was formed on the daily chart of SPY and so we may have more to go in this bottoming process. Also we have to keep in mind that if bulls all capitulate and everyone walks away from the market, we could still have a big crash day in markets where a flush and long lower candlestick occurs that actually marks the capitulation bottom.

There are many stocks that look like compelling deals and there’s getting to be more of them each day so stay optimistic and patient. If you’re going to go long something, dip your toe in the water with a very small entry and be prepared to sell for a loss if you stop loss is broken.

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