If you’re short Amazon (AMZN), raise your hand and Tommy will come over and hit you on the head with a tack hammer.
There was no end to the stream of people getting killed trying to short this stock. I’ll admit, this was one of the stocks that I talked about day trading yesterday. I tried to short it Friday morning after earnings and a huge gap up, but I quickly turned it around for a 3 point gain. There was no way I was touching a short today.
There is NO reason to be short this stock right now. It is in uncharted territory which means there’s no support or resistance to bounce off of. We have no way to gauge how people will react as this stock runs because there’s no history. At no point today did Amazon (AMZN) even feign weakness. I don’t understand why the $AMZN stream on Stocktwits had so much talk about shorting this stock.
I agree that this stock is way overbought at the moment. It will probably come down soon, but picking tops/bottoms is one of the worst trading strategies in the market. Generally if you really have to try to pick tops/bottoms you should wait for a reversal pattern to emerge before entering a trade; Amazon (AMZN) showed none. If you can find any, please share them in a comment.
Amazon (AMZN) doesn’t care what you think it should do. This stock will tell you where it’s going to go when it feels like it. Stop trying to force your beliefs on the stock market. It doesn’t care and it will crush you.
If you’re holding a short position and it works out, you got lucky. And lucky trades are bad trades. I’ll take a good loss over a bad trade any day.
I like to rant on this subject frequently so here are some related articles:
- “The Market Doesn’t Give a Shit About You” – I describe what you can and can’t control when you trade
- “Thinking Instead of Trading?” – I describe a major missed trade in AIG because I sat around waiting to short it rather than going long (Sound familiar AMZN bears?)
Related posts:
- Amazon Buys Zappos and Creates a Day Trade In my post, “10 Ways to Build a Better Watch...
- The Stock Market’s Failure is a Day Trader’s Gain When they talk about “making money whether the stock market...
- A Trade in Tweets – RIMM Short I had quite a morning day trading today. The following...
{ 6 comments… read them below or add one }
75 BILLION MKT CAP , 30 % UP IN 2 DAYS , QUALIFIES FOR A SHORT. PARABOLIC RISES HAPPENED IN 2000 , AND FAIR VALUE SHOULD BE $112
These are reasons why it should make a good short soon, which I agree with.
They are not signals to take the short yet though.
OK – then if you agree these are ” REASON ” to take a short , then what are you to make the deciding factor ? To me , now you have a huge gap fill void, it will be filled – maybe not in the next week, but it will.
If the gap is the play you’re looking at, waiting for the price to enter the gap is the most basic type of confirmation for a short.
IN My opinion , as what happens, happens for a reason – and I am long – but these big boys- AMZN , PCLN , AAPL , will be easy to bag 20-30% AMZN TO $105 EASY RETRACEMENT , PCLN – EASY $150 – AAPL EASY $175 – NO DOUBT !!
Once a little fear gets in little investors, they panic, and sell , and they will sell.
No one is buying these 3 shithouses up here.
They’re all flying pretty high right now.
Initiating a buy at these levels would be about as foolish as shorting.