Amazon update

In my previous AMZN update the shares were up around the 38.2% fib and I wondered if they were done at this point or whether they would go to the 50% fib.  Turns out as shown below that they bounced all the way to the 61.8% fib.  As you can see below, the first of the 3 waves ending with a rising wedge, then red a-b-c and then another wedge kissing right up to the 61.8% fib.  That could be just 3 of 5 of C but I'm going to call it 5 of 5 of C because of how it kissed the 61.8 and also because other stocks seem like they have peaked.  But it could also follow the blue model without surprising me.

Now is the time to buy puts because we should be heading into the teeth of a 3rd wave down.  Remember that 3rds are generally the strongest wave and never the weakest and wave 1 already showed us a powerful move from $410 down to $285 before bouncing.  Also, since wave 2 was a vee, wave 4 will likely be sideways thus giving you more time to think and watch things before cashing in.  The safe play is to pay up for the 2016s.  I think the 160s will easily be in the money by then.

160.00

AMZN160115P00160000

1.78

0.00

1.37

1.80

16

106

At the other end of risk tolerance (very risky), a fair bet would be to get some Oct 2014 $250 puts.  Yes, this is closer in than I usually like to play it but talk about an asymmetrical bet.  Pick up a nice bundle of these at 50 cents and then let's talk in October when they are $3, perhaps more.

250.00

AMZN141018P00250000

0.48

0.07

0.44

0.51

5

1,076