Member Request: Where Are We at in the $AMZN Wyckoff Structure, and Where Can it Go Next?

A member has submitted a chart request for $AMZN. The first thing we can obviously note is the Wyckoffian nature of the pattern over the last 18 months or so. I won’t bother to offer a count for this structure as it’s virtually impossible to get it just right. But, there are some important things we can discuss.

  1. A Wyckoff structure such as this is necessarily either accumulation (or re-accumulation in this case), or distribution
  2. Despite what one might initially think looking at it today, we cannot quite yet conclude that it is distribution (it probably is, but we need a little more time and price to be sure)
  3. If this is distribution, where I have the green “A” is called a “sign of weakness,” and the green “B” is a point of supply (any further failed rallies will be the “last points of supply”)
  4. It is notable that the point of supply came at the midline of the range we’ve been in
  5. Falling below the range a second time (we did at green A, and we’re doing it again now) is decidedly not a good sign
  6. A typical Elliott wave structure we would expect to see falling from the November high is (at the very least) a zig-zag, with the two legs being (at least) equal in length.
  7. If this continues to fall, that provides us with a target of $2,222 (noted on the chart)
  8. However, we must also note that re-accumulations often end with what it called a “spring.” That’s a terrible drop at the end of the consolidation that shakes out all weak hands prior to a major markup. If this sees strength, then we may simply be in that process now.

Takeaways:

  1. So long as the midline of the old range is resistance above us, we should probably expect a move to green C
  2. If we see a huge high volume daily bar come in, beware of the possibility of a spring here, instead of a “sign of weakness”
  3. Until/unless we see that, this chart remains decidedly bearish for the time being
  4. I am keeping an eye on this one on the Other Counts page, and will be monitoring this there for a while

AMZN


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