‘Tag Team’ Is Designed To Fool the Rubes
The stock market’s masters have been working AMZN and AAPL like a tag team, pressing one into service when the other lacks the energy to goad stocks higher. That surely describes the current dynamic. DaBoyz short-squeezed AAPL for a third straight day, more than offsetting the drubbing AMZN is getting tonight on a downbeat earnings report that has sent the stock plummeting $100 after-hours.
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The selloff is a brazen shakedown, to judge from the news that caused it. Here, supposedly, is what is ailing Amazon:
“Concerns include slowing unit and NA Online growth, slowing subscription/advertising segment growth, gross margin miss, and guidance (likely reflects India issues, lower 3P fees).”
What a load of crap! As bearish as my outlook for the stock market is, and has been, this is the kind of ginned-up news that would make me want to buy the stock, not dump it. (In fact, and for your information, AMZN became a “mechanical” buy, in Hidden Pivot parlance, this evening at 1646.15, stop 1591.37.)
When Bears Throw in the Towel
The way DaBoyz are able to work the two stocks reminds me of how slot-machine “mechanics” in the old days used to “rhythm” two machines simultaneously to extract the maximum payoff from the house. That’s what’s going on with this bear rally, as leadership rotates from AMZN to AAPL to a few other institutional workhorses.
No one can predict exactly how high the rally will go, but we already know its purpose: to fool the riff-raff into thinking it’s capable of achieving new all-time highs.
The Dow and S&Ps aren’t quite there yet, but they will be soon if the wiseguys can get AMZN and AAPL to rise simultaneously.
Bulls aren’t the only ones Mr. Market is intent on fooling; inveterate skeptics like your editor fall in a special category of his for whom no degree of punishment is too nasty or humiliating. We see it as our job to warn off the rubes as the rally grows more appealing. At some point, however, even we could be forced to throw in the towel as a patently phony rally morphs into the real McCoy. This seems highly unlikely at the moment, given the economic headwinds from China and Europe, and the steady implosion of the U.S. housing and auto sectors. Even so, we’ll be looking over our shoulder as the AMZN/AAPL tag team gets revved up to-the-max in the weeks ahead.
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