Swing Trading and Market Timing Knowledgebase

By: John Crane, swing trading guru

Market Timing Amazon

Figure # 5.14 - Amazon.com closed at the high of the daily trading range on the July 28 swing trade date, (E). The next day, July 29, closed lower followed by another lower close on August 1 that completed a potential Market timing Reaction Swing at (F). The Market timing Reaction Swing was confirmed on August 2 when AMZN traded to a new high and closed at 46.51.

That high was still standing three days later as the stock market pulled back to a pivot low of 45.17, (G), followed by two higher closes into (H). The stock market had formed a new bearish Market timing Reaction Swing and possible TR pattern that could not be ignored. The Market timing Reaction Swing was confirmed the following day—August 10—when the stock market dropped below the pivot low. This should have closed out any existing long position with a small loss and entered a new short position in front of the stock market collapse.
amazon chart
Figure # 5.14 – Amazon.com (AMZN)

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**THE RISK OF LOSS IN TRADING CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER OR OVER-COMPENSATED FOR THE IMPACT IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT.NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES.

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