The attached chart of Amazon shows a series of turning point pivots within the highlighted box. Even more if one takes the chart back to 2021. These are important because the market has a memory. It very often likes to pivot in areas where it has done so before. By pivot I mean create a high or low and a reversal. So Amazon is in an area of support where a reversal has a higher probability of occurring. 

As I explained previously I think if this bottom in Amazon does form, I think it will take some time to do so. At the start of the week I initiated a calendar spread In Amazon, that actually benefits from a sideways consolidation, but with plenty of flexibility to slant the spread bullish or bearish as needed. The ability to use the “floor traders advantage” in the short leg of a spread is money. It is the crux of Target Zone trades. 

So far this week, the spread has widened a little bit (has become profitable) even though it’s a call spread and the market is about $5 lower since we initiated it! That’s the beauty of the flexibility option spreads can give you. If you know how to use the right type of spread in a given market environment, you can profit from all sorts of scenarios, not possible with only a put or a call.

Thanks,

Joe