Intentionally Perverted Technical Analysis For Dummies

Don’t blink because this was one of those crazy days where a ton of stupid things were alleged about the stock market. Conceivably the stupidest of all was the concept put forth that Amazon (AMZN) and Google (GOOG) are buys right now. Who wants to go long a downtrending stock. No one, true?

TheStreet.com ran an editorial declaring “Rally Is On” today after market close. The editorial then goes on to quote Joe Terranova as telling us the downside momentum of the market has been reversed and that it’s time to get into names like Amazon (AMZN) and Google (GOOG).

Now let us put TheStreet.com to an honesty test and look at if the downside momentum of the market has reversed and if it in actuality is time to buy Amazon (AMZN) and Google (GOOG).

In this video I look at the charts of Amazon (AMZN) and Google (GOOG). What I find might upset you and it most likely will nauseate you. Both stocks are in a downtrend.

No vital marks have been retaken and if you check out the volume to determine the momentum, you will uncover that neither these stocks nor the stock market as a whole has reversed downside momentum as of the close today. The Accumulation Distribution and On Balance Volume technical analysis studies both expose that the small spring up over the last two trading days is not anything more that a two day bounce within a bigger two month downtrend. What did you expect it to show? Two up days does not a market make. In fact, the volume on both charts shows the buy side volume dropping off.

Now look, I have no interest in talking down Amazon (AMZN) or Google (GOOG) but the chart is what it is. I’ll be the first to go long this stock market when the trend reverses. The downtrend has not reversed so far and I find it enormously corrupt and misleading of TheStreet.com to print articles that would suggest otherwise. This is why you must learn technical analysis. Do not be the victim of these professional talking snakes that wish for you to go long in a downtrending stock.