Amazon Stock Twiggs Money Flow Breaks Positive

The Twiggs Money Flow on Amazon stock has broken above the zero line and has gone positive for the first time since August 7, 2017.

Amazon just rolled out Amazon Fresh in my area of Fresno, California. I signed up for the 14-day trial for Amazon Fresh and immediately canceled it because of the poor delivery times. On Saturday, I ordered 4 peaches, and a bag of shredded mild cheddar cheese. Amazon Fresh said they could not deliver it until Tuesday, LOL. I cancelled and told them I’ll just go to the grocery store myself and pick up these items in like a hour. If Amazon Fresh is going to be successful, they have to get delivery times down to same-day and at most, one day later. If they can’t do that they might as well close down their Amazon Fresh website because only the elderly and disabled are going to be willing to wait 3 or more days for their groceries to be delivered.

I think Amazon is poorly executing on their Amazon Fresh division. Amazon Fresh wasted about an hour of my time when you include the time it took me to order and then to cancel my order as well as my Amazon Fresh trial. I won’t try Amazon Fresh again for a long time. Maybe I’ll never try it again. That’s the cold hard reality of retail: first impressions are everything. Amazon has blown it in their roll out of Amazon Fresh by promising too much and then not delivering. Still, if any company can turn this around it’s Amazon.

MKM Partners recently gave Amazon a target price of $3,330 which you can read about here.

I’ve been trading in and out of Amazon stock for about a month now and it’s been a great stock to swing trade.

Amazon Stock

Amazon stock looks strong.

That’s a good basing pattern and perhaps even an inverted Head and Shoulders pattern. The 50 day moving average (blue line) is setting up a possible breakout play. Here is a swing trading lesson on breakout chart patterns.

In addition to the Twiggs Money Flow going positive, the Effective Volume study shows large players volume is still in an uptrend.

Prices have been consolidating lately forming a momentum squeeze on the chart:

stocks-to-watch amzn chart 1100x823 - Amazon Stock Twiggs Money Flow Breaks Positive

The TSI is holding its buy signal cross from August 30, 2017.

There is very little resistance above the current price. There is a support zone below the current price at $972.24, a stop order could be placed below this zone.

Amazon Stock Pulls Back To Juicy Level On Whole Foods Pricing

Amazon stock has pulled back to mouth-watering levels as the company announces that they will lower Whole Foods prices beginning Monday, August 28, 2017.

Today did this report on the Amazon pricing strategy on organic food:


Source: YouTube

Amazon.com reported an earnings miss last month which was a big blow to bulls. The e-commerce giant reported a Q2 EPS that fell to 40 cents from $1.78 a year ago which totally missed the FactSet consensus of $1.41. Not only did Amazon totally miss expectations for their profit in Q2, but they cut in half the expectations of what they’re going to make over the next 12 months.

Amazon Stock

Amazon stock has pulled back to an excellent entry level.

It is too early to take an entry in Amazon right now. Price movement has been a little bit too volatile to find a good entry and exit point. It is probably a good idea to wait for a consolidation first.

Notice how well large players volume is holding up as the price of Amazon stock has dropped. This is a positive divergence and is bullish. The Twiggs Money Flow is starting to round up but we need more of an upward move before making that assessment.

A stop limit order strategy like this may be the way to play Amazon.

It’s hard to go wrong buying oversold quality stocks like Amazon. I did a lesson on stock trading strategies that work here and how to play oversold stocks like Amazon.

4 Stocks to Buy For Big Tax Cuts Coming End of Year or Next Year

A powerful catalyst for some stocks will be the big tax cut coming by the end of the year or early next year. The idea is to find stocks to buy of companies that are paying the highest in income taxes as these are the companies that will benefit the most when taxes are lowered.

The way this catalyst works is that going into next year, I forecast that we will get some kind of tax reform and tax cuts. Therefore companies that are currently paying high tax rates will have positive earnings revisions as a result of a big Trump tax cut.

Stocks to Buy

#1. Amazon

According to 2015 taxes, Amazon has one of the highest tax rates of any company. The company paid a Federal tax rate of 31.5%. Big tax cuts will impact Amazon in a big way. Amazon is my favorite of the top stocks to buy for future tax cuts.

AMZN presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 998.31. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 983.11, a stop order could be placed below this zone.

#2. Facebook

In 2015, Facebook paid a Federal tax rate of 78.9%. Facebook disclosed in early 2016 that it could owe billions due to an IRS investigation into the way it moved assets to an Irish subsidiary to avoid higher taxes.

The IRS tax penalty could total $3 billion to $5 billion, plus interest, according to a Facebook filing with the Securities and Exchange Commission.

FB also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 155.28. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 151.81, a stop order could be placed below this zone.

#3. Walt Disney

Disney paid a 2015 Federal tax rate of 33.2% and is one of my least favorite of the stocks to buy because of its current downtrend.

Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 104.34. Right above this resistance zone may be a good entry point.

#4. Altria Group

Altria paid a 2015 Federal tax rate of 29.4% and again is one of my least favorite stocks because of its chart.

Altria Group’s price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

Amazon Stock Price At $3000 In 10 Years Says Wedbush

Michael Pachter of Wedbush thinks Amazon stock price will go up 200% within 10 years and hit $3,000 according to a report by CNBC. Amazon has been making all the right moves and we are about to see how Amazon prime day works out today too.

Pachter said that Amazon stock price at $2,000 – $3,000 will give the company a $1 trillion market cap. Pachter also says the company will do $1 trillion in revenue too.

AMZN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 118.93%, which is quite impressive. Measured over the past 5 years, AMZN shows a very strong growth in Earnings Per Share. The EPS has been growing by 53.13% on average per year.

Amazon Stock Price

AMZN is a decent long setup right now. We see reduced volatility while prices have been consolidating in the most recent period which has triggered a momentum squeeze. The Effective Volume shows large players have not been selling AMZN into the most recent pullback; however, the Twiggs Money Flow has been falling which suggests the stock is under distribution right now.

The True Strength Index is very close to giving a buy signal.

There is a resistance zone just above the current Amazon stock price starting at 998.85. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 982.32, a stop order could be placed below this zone.

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Top Large Cap Growth ETF iShares Core US Growth ETF

The top large cap growth ETF to trade right now is the iShares Core S&P US Growth ETF IUSG. This ETF tracks the S&P 900 Growth Index which measures growing companies using three factors: sales rate of increase, the ratio of earnings change to price, and momentum.

Large Cap Growth ETF iShares

The top 10 holdings in IUSG as of July 10, 2017 are:

Apple Inc = Information Technology
Microsoft Corp = Information Technology
Amazon = Consumer Discretionary
Facebook Inc = Information Technology
Alphabet Inc = Information Technology
Alphabet Inc C = Information Technology
Johnson & Johnson = Health Care
Comcast Corp = Consumer Discretionary
Home Depot Inc = Consumer Discretionary
Unitedhealth Group Inc = Health Care

Large Cap Growth ETF iShares Chart

IUSG is a good long setup opportunity. The chart has both a pocket pivot and positive divergence on the Effective Volume large players indicator. Prices have been consolidating lately and the volatility has been reduced setting up a momentum squeeze.

The True Strength Index on the Large Cap Growth ETF iShares IUSG has yet to do a bullish cross so some caution is warranted. There is a resistance zone just above the current price starting at 48.55. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 48.31, a stop order could be placed below this zone.

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Machines and Computer AI Are Not Going To Take All Our Jobs, Here’s Why

A vigorous debate is going on between economists, stock traders, and investors on if computer A.I. and automation will take all our jobs and destroy the economy. I have been studying this issue for more than a year and I’m ready to give you my final opinion on the subject.

Please take a moment to watch this video of two of my economics teachers debating if machines will take all our jobs and thus destroy the economy. This will give you a good economics foundation on both positions so I can give you my opinion without rehashing the entire argument.

At first, most people will support Tyler Cowen’s position that computer A.I. and automation is bad for the economy. But over time, I think you’ll come to the decision that Alex Tabarrok’s position is the right one.

Let’s take Tyler Cowen’s argument to the extreme. Let’s say that computer automation continues to eliminate good paying jobs and that rich CEOs and business owners make crazy profits while the rest of us go broke without a job. In this scenario, millions of people will be without jobs.

The unemployment rate would rise about 10%, then 15%, then 20% and beyond. What would happened to consumer spending? It would drop as nobody would have any money to buy what these rich CEOs and business owners are producing.

For example, Amazon takes over Whole Foods, eliminates thousands of cashier jobs, and replaces those jobs with automated checkout stands. This lowers the price at which Amazon sells food because of lower labor costs. Now Albertson’s and Walmart, they follow what Amazon does so they too can compete on price. Soon the entire grocery industry becomes mostly automated. Now imagine that this plays out across many sectors beyond just grocery as millions of jobs are replaced by computer automation. If that happens, who is buying what the computer automation is producing? Nobody.

The rich will stop getting richer and the entire economy will implode as the human race destroys civilization through expanded automation and the pursuit of greed at any cost.

Rich people are not stupid. They know that employees are also their customers. Rich corporations and CEOs are not going to advance an agenda that is ultimately going to result in their own destruction. But it’s more than just that, it’s economics.

If computer A.I. and automation caused massive unemployment and poverty, consumer demand would fall through the floor and there would be no demand for the products that computer A.I. and automation creates. Therefore, economics tells us that if there’s no demand, these services and products would cease to exist. Corporations would have no need for automation and so they would stop investing in it and developing it.

Here’s another example. Back in the early 80’s, I was a computer programming prodigy. I learned programming on a Commodore 64 and did things that blew people away. I was going to be a computer programmer when I got out of high-school, or so I thought. By the time I graduated high-school, coders like me with mad skills were obsoleted by “canned software”. Was I out of a job opportunity? Not really. 3D video games used canned 3D engines which allowed games to be produced by a greater number of businesses. Because the engines driving the 3D games were “canned”, it brought down the cost of video games. More people could afford video games at $30 instead of at $90 or more back before canned software. An entire gaming industry rose up and is now a multi-billion dollar industry.

The Internet came soon after and so I started programming websites. I learned Java, HTML, SQL, and PHP. Just when I was getting really good at programming websites, along came the “canned” software again. AOL came out with Rainman in the early 90s and back then, AOL pretty much was the internet for most people. I still got a little bit of work from various businesses but then came out BBS’s which allowed anybody to set up a message forum and put up a dial up website. In the early 2000s came WordPress, another “canned software” that greatly reduced the need for my programming skills. Every business on the planet began putting up a website and shopping cart and the ability to buy things online was born. People began making money selling things online. Was I out of a job? Not really. WordPress lead to millions of people putting up websites and so I finally got smart and realized the money was in content production and selling online and not in computer programming.

If computer automation was something that was so bad for the economy, then why has the internet and automation made the world better for so many people regardless of their income class? If automation (which is what “canned software” essentially is) was something that was bad, economics and the law of supply and demand tells us that its value would eventually go to zero and such automation would stop because their would be no demand for it. But that’s not what has happened. Today, millions of Americans make money online with automated CMS platforms.

I could go on. What about stock trading? Back in the 70s and early 80s, you had to call a broker on the phone and pay $120 a trade or more if you wanted to invest in the stock market. When the internet came out and the discount broker industry sprang up, brokers said it was going to destroy their industry. Did it? Not really. With cheaper trading fees of $10 a trade and lower, millions of Americans began investing in the stock market. Brokers went to work for online discount brokerage firms as more people than ever started investing and stock trading. If the internet and automation was a bad thing, the value of online brokerage firms would eventually drop to zero as demand for their services would eventually come to an end. That’s not what happened. In fact, entire new trading software companies sprang up and even stock trading blogs like GuerillaStockTrading came into being.

Computer automation has created new jobs that no one could even imagine 40 years ago. Automation has increased wealth across all income classes as prices are lowered so consumers are happier and can buy more with their hard earned dollars. The economy becomes deeper and more diverse as life becomes richer with greater opportunities for everyone, even someone who is disabled with Muscular Dystrophy (M.D.) like myself that can’t do a more physically demanding job.

Computer automation has led to so many opportunities that years ago, a disease like Muscular Dystrophy (M.D.) would have doomed me to poverty because physically I’m unable to do a lot of jobs. Today, I can work a day job in an office as a bookkeeper and in IT support, and at night I can stock trade and produce value for others over the internet blogging about the stock market. I’ve never been on government assistance and a burden to tax payers even though I have M.D. thanks to computer automation creating a deep and diverse economy.

For every change there’s always another opportunity of equal or greater value waiting.

Therefore, my final opinion on computer A.I. and automation is that it’s a positive for the economy. I don’t believe that computer A.I. and automation is going to take all of our jobs because of economics and the law of supply and demand. If it did take all of our jobs, it would cease to be. Our goal then is to find emerging opportunities in this space that we can invest in and make a fortune over the coming years.

You may be angry because you lost your job to automation and so you don’t agree with me. That’s fine. I understand this is a highly debated topic even among brilliant economists. This is only my personal opinion based on my own life experiences and observations that I wanted to share with you.

AMZN Stock Price Finally Pulling Back To Juicy Level

Finally! AMZN stock price is pulling back to a compelling entry level. If you’re like me and have been waiting for a pullback or consolidation in Amazon’s stock for an entry, check out the chart.

Amazon shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 118.93%, which is impressive. The Earnings Per Share has been growing strongly at 53.13% on average over the past 5 years. Measured over the past 5 years, AMZN shows a very strong growth in Revenue. The Revenue has been growing by 36.57% on average per year.

AMZN Stock Price

The Effective Volume study shows that large players are buying Amazon’s stock as it pulls back and consolidates. The stock has setup a momentum squeeze on the chart.

There is a resistance zone just above the current price starting at 968.28. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 967.99, a stop order could be placed below this zone.

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More Evidence Tech Pullback Is Just Reversion To Mean

The sell-off in technology is more about market reversion to the mean than it is indicative of some gloom and doom scenario where technology stocks lead the rest of the market lower.

Credit Suisse just released a report to clients where they are neutral to slightly cautious on technology stocks for the next 3 months, but remain positive longer out.

There are many bottoms-up drivers in the technology sector right now including the new iPhone, continued increase in cloud usage, greater adoption of artificial intelligence across various sectors, and autonomous driving. Technology adoption and market penetration are likely to increase over the next couple of years.

The S&P 500 is dominated by a few big tech companies. Innovations such as more automation in the grocery industry from Amazon, the iPhone 8, and Tesla’s Model 3 are catalysts for the S&P 500 to move even higher.

Reversion To The Mean

The green line is what I would calculate the mean to be at. As you can see, QQQ has overshot the mean over the last few months and so a move back towards the 10 year mean line is normal.

Fiscal policy will also be a catalyst for continued growth such as tax reform. The medical device tax, investment tax, tanning tax, Medicare Hospital Insurance surtax, the health insurance fee and tax on brand pharmaceutical manufacturers, all will likely be repealed at some point in the future.

Credit Suisse set negative expectations for consumer goods. Stocks that trade in the consumer goods sector are likely going to be stocks we should avoid. Fundamentals and valuation are likely to continue to deteriorate in clothing, department stores, grocery, and packaged food.

New Amazon Drone Patent – Yeah That’s Just Crazy

In a patent application published yesterday, Amazon described how multi-level fulfillment centers for unmanned airborne vehicles might help put drones where they are needed. The application notes that due to their large footprint, present warehouses can be found on the outskirts of towns where space is available. But multi-story drone centers could be constructed vertically, rather than horizontally, letting them be put within downtown districts and/or other densely populated urban places. Making them high-rises would allow the drones fly in and out without getting dangerously near pedestrians at street level.

Amazon’s application includes sketches of a variety of differently shaped buildings and interior views, showing how human employees would load-up the drones with packages.

It’s very likely that the tower could be particularly useful to Amazon in densely populated regions, such as Manhattan, London, and Tokyo. However, several regulatory hurdles would have to be overcome before Amazon could begin building the towers, should it decide to push ahead with the idea for them.

Flying huge numbers of drones in cities invites other problems too. Who’s going to want to live near a drone shipping tower if it makes a lot of noise? Amazon addressed the noise problem in their patent with different ways of splitting up the airflow around propellers to try to alter or decrease the noise they make.

Needless to say, patents are no guarantee this drone tower will become a reality, but Amazon’s been pursuing drone deliveries in the past couple of years. In March, the company’s drone delivery arm, Amazon Prime Air, sent its first package out in public in the US.

You can read the Amazon patent application here.