Today is the last day of the month. Typically this is good for 100 points or so to the upside in the Dow, intraday or for the day. Just a few days ago Amazon hit a new high, together with some of the other FANG stocks. Briefly Jeff Bezos beat out Bill Gates as the richest man in the US, perhaps even the world provided that stories about Putin’s wealth are untrue.
AMZN has dropped about 10% since. At the peak the P/E was close to 200, which is another way of saying that if you do buy the stock, it will take you 200 years to get your money back. On the political front a New York businessman, actually a fund of funds outfit’s principal , a bad business at this time sold at too high a price to a Chinese firm according to rumours, survived only eleven days of the White House. While his wife gave birth during that time and filed for divorce, he demonstrated his knowledge of the English vernacular. In any event there is no chaos in the white house and the economy is doing extraordinarily well as witnessed by the stock market.
Could this maybe be a top of sorts? Clearly the RSI is back up there for the first time in 5 months. There are 5 waves up and the 5th is equal to the first. The trend line was broken today. We would play it safe here and get out. First drop could be about 600 points, next 1600 points. After that we will see.