Amazon Plunges And Trade Triangles Save The Day

Amazon shares fall 9.5% and the company's founder reduces his holdings. (AMZN), which posted its quarterly earnings on Friday, disappointed many investors with slipping margins. The market reacted quite dramatically with shares of Amazon skidding downhill for a loss of 9.5%.

MarketClub members did not have to sit through this downturn as we exited Amazon on January 21st - some five days before the report. How did we know the report was going to bad? The truth is we didn't know, but our "Trade Triangle" technology recognized that something was amiss and alerted members who follow Amazon to exit pronto.

As the graph will show, we have had two trades since September 1st of last year and in both of these trades we were successful, giving us gains of $36.85 a share.

Our long-term indicator continues to be positive on Amazon, but for now intermediate-term traders should be on the sidelines counting their money and waiting for a better opportunity to re-enter this stock.

Another worrying concern is what Bank of America/Merrill Lynch said today, "Owning the stock here requires trust and patience. We have seen Amazon go through investment cycles before and believe investment in growth is the right long-term strategy for the Internet."

Not exactly a ringing endorsement in my opinion.

Well, forget trust and patience. We prefer to trust our "Trade Triangle" technology as it has consistently proven to be successful. Our "Trade Triangles" produced just 2 trades in Amazon since 9/1/10. Producing a very respectable 47% return in just five months.

If you're not already a MarketClub member, you should seriously look into our "Trade Triangle" technology. It will help get you into the markets at the right time and out before everything starts to slide.

You can learn more about MarketClub by clicking here, or you can sign up for a 30 day risk free trial right here.

All the best,
Adam Hewison

President of
Co-founder of MarketClub

19 thoughts on “Amazon Plunges And Trade Triangles Save The Day

  1. Hi Adam,
    > If you are an intermediate term trader, I would recommend using the monthly trade triangles for trend and the weekly trade triangles for timing.
    So one would enter when the monthly green signals an upward trend, and then exit when the weekly red shows sell?

    1. Sid,

      Here are the rules for trading stocks:

      The major "Trade Triangle" to watch in trading stocks is the monthly "Trade Triangle" as this triangle determines the trend. We use the weekly "Trade Triangles" for timing purposes. Let me give you an example, if the last monthly "Trade Triangle" is green this indicates that the major trend is up for that stock. You would then use the initial monthly "Trade Triangle" as an entry point and use the weekly red "Trade Triangle" as a stop out point. You would only reenter a long position if and when a green "Trade Triangle" kicked in. You would then use a weekly red "Trade Triangle" as a stop out point. Providing that a monthly green "Trade Triangle" is in place the trend is positive for the stock. The reverse is true if a red monthly "Trade Triangle" shows that the trend is down. You would then use the weekly "Trade Triangle" for entering and exiting the market.


  2. I dont use the service or trade Amazon but one question/comment I have is that when in the day the signals come would be crucial. For the Amazon recent entry/exits I suspect the algorithm gives a signal after a big enough bullish or bearish move, all other things considered. If the green weekly signal comes late in the trading day (and you have to buy or sell during trading hours) then entry would be more like $178 per share not $169/170 per share when the day started. Same for exiting, if late in the day with a red signal more like $177, not $184. So actually the last trade could quite possibly have been a loss or break even trade (even before costs are added). Any comment? Of course a stepped up stop loss/take profit could have seen a profit but then one is not using the triangles only.

  3. Adam, Its great that it works. How often does it fail?
    (Don't forget the false negative signals when looking at failures).

    1. Sid,

      Our Trade Triangles work very very well over time. That is not to say that they are correct every time, no program that I know of in the financial markets is correct 100% of the time. However having said that the Trade Triangles are right enough times to make them very worthwhile following.

      All the best,

  4. Could I have found Amazon the day it gave the monthly if it was not a stock I was already watching/tracking? Is there a way to scan say, all new monthly signals each day?

    1. BG,

      The short answer is yes. You could have looked our SmartScan technology and looked for weekly trade triangles and Amazon will popped up.

      I hope this answers your question.

      All the best,

  5. Adam,
    Thank you for the clarification. I traded AMZN through the earnings and got burned. My comment was not to prove you / triangle technology wrong. As you said, I did not read the signals correctly and I did not mean to say that you make stuff out of air.

    I am novice trader and hope to learn from the technology and use them to improve my trading.
    Can you please comment on if I can use the daily trade traingle signals in crude to trade the ETF "USO". I generally trade options and there have been a lot green and red traingles on consecutive days which are making enter and exit trades frequently and hence incurring losses.

    1. Praveen,

      We would recommend when trading the ETF, USO as follows. If you are a long term trader, just rely on the monthly trade triangles. If you are an intermediate term trader, I would recommend using the monthly trade triangles for trend and the weekly trade triangles for timing. Using daily trade triangles on stocks is not our favorite thing to do and it's not recommended by MarketClub.

      I hope this answers your question.

      All the best,

  6. if you trade trending stocks using the monthly / weekly triangle strategy, you WILL make money. The key is to become adept at spotting trending stocks. Stick to patterns / indicators that you've already had success with, or, with well known patterns if you're a novice.

  7. Adam is right. For me, using the monthlies as trend and weeklies as entry/exit works best on stocks for non-day trading -- I use a weekly as a price benchmark and if I can beat that price while it's on due to the daily froth, I might get more. If you day trade and get to be good at it, you can most often do better than the dailies because you're looking at them, plus every bit of news and on balance volume and other indicators on that particular issue. The triangles more time "dumb human psychology tendencies" and do it quite well for the various time periods humans tend to react over. The frothy intra-day type trading is more driven by news and similar things the triangles don't (and can't) take into account.

    Now if Adam would explain to me what it means when the email alert flashes me a green monthly triangle when there's been one on that stock already for awhile, I'd be happier with the email alerts.

    1. Doug,

      As you know we are continually updating and improving MarketClub. This is one area that we plan on doing a lot more work in the future to make it even more positive and better. Stay tuned.

      All the best,

  8. Trade triangles information is of value only if available on time. The delivery of charting information & trade triangles has become unpredictable and my alerts stopped working. It is working only before and after the market closes. For me, this delayed access to the information is becoming useless information.

    1. Rakesh,

      As you know we are continually updating and improving MarketClub. Tracking over 250,000 symbols every day 24 seven is no easy task for company of any size. Our goal has always been to be the best and this is an area that we are striving to do more work in.

      I appreciate and respect your comments.

      All the best,

  9. Adam
    You are correct 100% , Veteran like you, spot this without triangles. That was a kiss good bye (re test) for AMZN. And thank you for all your calls on GOLD, OIL and SPY. You are one of the greatest. (give your wisdom without any expectation) God bless you.

  10. Adam,
    It had a daily green the day before. I am nost sure if you can claim that the trade traingles saved the day.

    1. Praveen,

      Thank you for your feedback.

      We have two ways of trading stocks with the trade triangles. The first is long-term and is just using the monthly trade triangles. The second way, is to use the monthly trade triangles for the trend and the weekly trade triangle for exit and entry purposes. We have been very consistent on this.

      The daily trade triangles are best used on futures, commodities and foreign exchange. With this strategy you use the weekly trade triangles friend and the daily trade triangles for exit and entry points based on the weekly trend.

      Hope this clarifies the situation for you and proves that we just don't make this stuff up out of thin air.

      All the best,

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