As long as the indicies don't get in the way, I think we get another and perhaps stronger pop to start the month. The action today was really strong, took every punch and kept moving up. The end of the day downturn in the market was too much to stick on the day's high.
I think it did really well today considering the whack-a-mole game that went on yesterday. With a decent market tomorrow, perhaps a nice pop!
Will FFIV bounce tomorrow. The long action was rough today. Every sign of strength was quickly given a beat down. I did like the support of $93 on volume into the close. It wouldn't surprise me to see $95-97 tomorrow if the indicies are green and hot money seeks a new home for more exciting price action.
You might be right. A weak unemployment report in the morning could send the whole market south in a hurry. It feels mushy.
Revenue growth is slowing. Competition is beyond fierce. HP Cloud is OpenStack based too and their pricing destroys Rackspace. My feeling is that the stock gets punished for Q4 or Q1 earnings. They announced cloud file pricing tiers for the first half of the year. Why the need to preannounce it instead of just doing it???
I think the rise is from two things: the fiscal cliff "resolution" rally and the Apple unwind. There must have been some massive long Apple : short Amazon, Netflix, S&P 500, etc. trades on that had a forced unwind last week. Eventually the math will win, when is the question. Q4 earnings on Tuesday is a very good opportunity. I can't remember a quarter in recent years where Amazon faced as many headwinds as they do right now.
I wonder if Amazon will take another writedown this quarter. This quarter could be so bad that they might as well kitchen sink it and take all the losses they can.
Good point about Hurrican Sandy. The only argument against it would be the notion of catch-up transactions or goods replacement later in the quarter, whatever that may be. I was stuck in Lower Manhattan for Sandy week while there for a work trip, I can say first hand that there was almost no commerce taking place other than repairs and food. This really is a game of inches with AMZN with their tight, unforgiving margins, so this does matter.
In the event of a loss of a couple hundred million and/or a revenue miss, then look out below. I think the mile markers are $240, $225, $205, $185, and $165. If the move is swift and vicious like Apple with forced liquidation, then maybe even lower. It might take a few more quarters for an indictment of the business. There's a problem with all out pursuit of growth: what happens if you make a mistake or the economy/competition forces one on you? There's no savings to pivot and the knife has to come out.
I'd like to remind everyone acting as a fiduciary to clients, family, or otherwise: it is immoral to chase bubble stocks. Go pay off some debt while you can. This earnings report is a dangerous situation. Long or short, you should be scared.
Don't get distracted by the trading surrounding the Apple unwind. AWS price cuts, Kindle, sales tax, vigorous pricing competition, etc., etc. equates to a soft quarter with an EPS loss and quite possibly a revenue miss. There is no debate to be had. The sell off will be material and there will be no recovery bounce like past quarters.
Website operators, check your device usage logs for the last month. Kindle Fire is about as close to zero percent as you can get.
If you see anything materially different, please do note it here.
I did some back of the envelope math on Q4. If Q3 to Q4 operating expenses rise on roughly the same percentage basis as 2011, then Amazon must post at least $23B in revenue to break even. With all the various and credible reasons mentioned on the board for a revenue miss, it seems reasonably probable that Q4 is at the bottom of the range or worse. Losing a couple hundred million in Q4 will not be positive for the share price.
Sentiment: Strong Sell