It's Not a Real Correction Until Amazon Loses a Battle

The early bounce attempt in the broad market was aggressively stuffed by sellers, as the Dow was off by well over 400 points this afternoon. 

While it is obvious that most indices are now short-term oversold, it is worth remembering that just as the market seemed like a one-way freight train on the way up, it need not obey the seemingly logical mean-reverting concept on the way down, either. Given the way the volatility index (VIX) is spiking back over 20 for the first time since the 2016 election, we seem to be in the midst of amore standard correction than anything we have seen since the immediate aftermath of Trump getting elected. 

With this in mind, I am debating an Amazon short, as taboo as it may be. Valued at nearly $700 billion market cap, AMZN is not getting bought out. It is not heavily-shorted and not a true squeeze play, either. Of course, CEO Bezos is already an icon and will be for centuries to come. 

However, we are also tactical traders and must distinguish between various timeframes and theses. 

If this broad market truly is in the process of staging a standard correction, then we should now see AMZN, post-earnings, fall below $1430 and set in motion the 30-minute chart head and shoulders top, outlined below. 

Mind you, I am not referring to AMZN losing a major war and topping out for the year or even the next few years. But even the best lose minor skirmishes here and there. And it sure has been a while since AMZN suffered so much as a flesh wound.