Changing Direction on Amazon

Amazon (AMZN) is the enigma of retail. It is all about sales. To measure this on a price-to-earnings basis is simply a joke. To measure this on margins or based on cash flow might even be worse. But quarter after quarter, it doesn't seem to matter. The stock often gets hit initially after hours, and then pops right back higher. I know that many folks will attribute it to a short squeeze, but the short interest here is really nothing of note. I believe since the first major reversal I can remember where AMZN did a dip from $118 to $100 then fully recovered the next day, almost everyone plays the same trade: Buy the big after-hours dip. It is almost a foregone conclusion that AMZN will rally if it sells off. I saw it on Twitter last night. A very good trader I know was making a sarcastic reference toward it, but he was 100% right. That is the trade everyone is playing. The story, the results, the margins, the guidance or anything else don't matter, really.

But I believe that this will end....279 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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