This earnings season we saw the Amazon effect pulverize tons of retail stocks.  The latest victim is DICKS.  All these stores are losing pricing power.  Investors have responded by rage buying AMZN shares.  Who else drives deflation and can thrive in an Amazon World?

The distribution center retailers.  Costco will succeed.  You shop inside their distribution centers.  What a twist!  Walmart will win.  They have a huge web presence and massive DCs.  Jeff Macke says Target should convert most of their stores into DCs if they want to be around in a decade.

Amazon will succeed.  They are leading the way in DC automation.  They are building a huge center in downtown Detroit and hardly hiring anyone.  EFFICIENCY!

I think Alibaba succeeds also.  This depends on the consumer falling in love with Ali Express.  Ali Express does not have the business-to-business feel of regular Alibaba, it sells China wares a la carte.  It is literally the Chinatown of the internet.  Every city has a Chinatown, why should the internet be any different?

I have not held share of BABA in a long time.  However, I know skepticism is high because last year they peaked out after Singles Day.  I like when sentiment like that resonates.  It helps me catch people flat footed.

I cannot chase Amazon; I can’t do it.  You do it.  But I like the idea of taking Walmart and Alibaba long term positions to expose myself to the major retail transition theme.

Comments »

The futures market is back open and ripping.  Your history books told you the day after MLK is caustic for traders, yet prices press higher.

I about fell out of my chair when I came back to my charts this morning and feasted my eyes upon the 30 minute profiles.  Where was I in the last hour of trade Friday?  I was pulling auditors out of my rectal cavity.  The neutral print occurred—my favorite intraday market profile print.  Had I been around, without question I would have been using the afternoon weakness to get long my favorite stock pick into earnings: Amazon.

This is my tip top pick into month end, and I am hoping the degenerate gambling class doesn’t send share prices spiraling higher before I can work a nice piece in place.  Amazon grabbed the golden ring with this Prime business.  There was so much two day shipping being added to orders USPS, UPS, and FedEx were overwhelmed and Christmas was ruined for many a child. ..single tear.  Best Buy is again being crushed under their own weight as they die a slow, gluttonous death.

The catalysts are in place for Amazon to rip nips over the next ten days.  Considering the public’s proclivity to go gentle on Amazon when they whiff earnings, the bold trader may consider carrying a piece of risk into the release.  However, statistics over the last 18 earnings announcements show holding long through earnings carries a 44% win rate.  The key, in my opinion, is booking some victory leading up to the news drop and defining your risk with a long call position.

But I get the feeling they crushed this holiday season.

Top pick this week and may the stock gods grant us unchanged pricing in the morning: AMZN.

 

Comments »