First, let’s get the unrelated news out of the way. Intel (INTC) is blowing the doors off, at least as I’m typing this. I have been unabashed bullish (yes, bullilsh) on INTC. Even today, before the close, I said on my tastytrade show that if there was one stock I would be forced to keep for twenty years, I’d choose INTC. So, hey, I’m not bearish on everything.
But this post is about Amazon (AMZN), which is getting its house set on fire. Again, out of an abundance of caution, I’ll say I’m typing this after the close, and Lord knows that reversals can happen. But I’m not expecting a conference call to save Amazon. It is getting absolutely crushed right now.
I deliberately avoid the likes of AMZN, but naturally I was feeling a bit of bear jealousy. Then it occurred to me: I had bought XLY puts earlier in the day. Was Amazon perhaps a part of XLY? I decided to check, and glory be, this is what I saw:
Yikes! So XLY will almost certainly take a hit at the opening bell. I was unwittingly short AMZN, albeit in a diminished way, but on the other hand in a leveraged way, since I had simply gone long XLY puts. The chart of XLY, below, just needs to break the part of the uptrend I’ve circled.
And, judging from AMZN’s pattern, it seems entirely possible to me that a much more serious wipeout of AMZN could be at hand. Let’s hope so.