That's an understatement. In any case, the action in NFLX is indicative of the market's health and it isn't pretty. There's a trade here, especially for options players, although I'd be looking for the longest expiration date I could afford as close to the money on a put. For traders shorting NFLX, take a look at the charts, I'd wait for a bounce or phase into the position with a little here and add on a bounce to about 50% of the intended position, the rest I'd add on a new leg down.
Check out the channel busters in NFLX and what has happened after the channel has been broken to the upside. This is a variation of the snowball effect of losses incurred by longs buying the channel breakout. It works every time. However, this most recent channel break may be the last in the uptrend.
The red square is the most recent channel break to the upside, the 15 min 3C chart shows the negative divergence which is most likely institutional money going short/naked short. You ca see what happened to price after, however we are approaching an area where profits will be taken and a reset for a new leg down should begin with a bounce attempt.
The 1 min chart shows a positive divergence suggesting that the bounce attempt is already under accumulation, so if it were me, I'd show some patience, maybe short a little here just in case the broader market tanks, but for the most part, I want to short into strength.
The 3-day trend channel has held the entire trend and is the stop that I would choose for my initial position around $220-$225, keep that in mind for risk management/position sizing.
The 2-day TC has held most of the trend, you can see in white in mid 2010 where it stopped out, but if you want a tighter stop, this is as tight as I would go for a position/trend trade and it's pretty close to the 3-day anyway-around $215-$220.
Look for the bounce, if you like the trade idea, keep in touch with me and we'll look for the distribution cycle to begin, that's where I'd start adding seriously.
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