In looking over the index charts today I did find something that is likely very indicative and could be "the" clue to the week and to the market in general.
Here is what I found:
The DOW is on the 5th rally wave since the uptrend started on Mar09 and using the Eliot Wave Theory, it means the top of the long-term uptrend could be at hand #$%$ waves is usually all that is seen before a major correction or new downtrend occurs. In addition, each wave has been weaker than the previous wave with the first wave rally which started on March 2nd 2009 being 4789 points, the second wave being 3262 points, the third wave being 2618 points, the fourth wave being 1618 points, and the current wave being 1424 points so far.
It should also be noted that starting from the top of the 1st wave seen on Apr10, the high to high rally differential (from one rally top to the next) has also been coming down with the first one being 1618 points, the second being 462 points, the third one being 323, and the current one, using Friday’s high at 13895, has been 234 points so far. As such, the Eliot Wave theory does suggest that the index will not rally much more above Friday’s high, certainly not above 13984, as that would make this top to top rally higher than the last one.
I do believe this is an important fact that will be seen and used by the traders this coming week.
I don't know if anyone put any importance to my observation but it should be mentioned that the DOW has not yet broken above the 13984 level that I mentioned as important for the Eliot Wave theory that a top is about to be found.
The DOW has maintained its strength but after 4 days of trying the bulls have not been able to accomplish that yet. The index got up to 13969 yesterday and today has been up to 13966 but no "cigar" yet.
As how this affects AMZN, I do believe it will affect it ultimately but tops like this usually take weeks to form completely.
It is interesting to note that the stock got up to 284.20 today and the previous high seen on Friday was 283.99. If the bulls are unable to get farther above today's high and the stock fails, it will become a "double top" and that could signal that no further upside will be seen.
The real level to look at is the Dow just above 14,000 was a major top and an obvious level to pull back off of. My angle is to short AMZN now, and short AMZN later with DOW nearing those levels again. If that doesn't work I mortgage my house and buy 1,000 LEAPS on TNA.