Amazon breaks 5-year support, as weakness after Drone high continues!

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The Power of the Pattern highlighted several months ago that Amazon looked to have created a top at the same time the new drone was introduced on 60-Minutes at (A) above. As mentioned above, when the Drone was being introduced, AMZN was hitting channel resistance and a long-term Fibonacci extension level. While these two resistance points were coming into play, it also created a Doji Star topping pattern.

Lets now take a current look at what AMZN is doing. The above weekly chart reflects a break below a 5-year support line has taken place. This week it kissed the underside of this channel and failed to climb back into it, as it created a rather large bearish engulfing pattern at (1) above.

What does all of this suggest for Amazon going forward? I think Jeff's face says it all, as price action suggests lower prices are to come. This price action could be very important for the NDX 100, due to cap weighting!

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Fear Index (VIX)- 4th largest 5-day decline since 1990, says Joe Friday & Ryan!

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The VIX just experience the 4th largest 5-day decline in the past 24 years. My good friend Ryan Detrick, shared the table above, reflecting the 5 largest 5-day declines in the VIX since 1990.

Premium members picked up XIV as the VIX was creating a bearish wick at falling resistance.

Joe Friday-  When fear gets lofty at key technical levels, short it!

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Large Bullish Wick takes place at support, of hardest hit sector!

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The past 90 days have not been kind to Crude Oil or Energy Stocks. Energy ETF XLE is down 15% in the past 90 days, talking about a big punch in the face!

This decline took XLE back to rising support off the 2010 lows and created a large bullish wick at this support line. The decline has also driven momentum to oversold levels seldom seen in the past few years.

Full Disclosure - Premium members picked up XLE last week when the S&P was creating bullish wicks. At the same time TLT created a monster bearish wick. See massive reversal wicks that took place a week ago today (see here) 

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