NFLX Follow Up

I'm using NFLX for two reasons, 1) it represented the reason why we suspected a move to the upside even before we had the charts to suggest the probabilities of that move were there, this was all based on market behavior, Wall Street using Technical analysis against traders, basically everything that backs up the reason this move was suspected is in the two articles I wrote and posted on the member's site at the top right, "Understanding the Head Fake Move" parts 1 and 2, it's all there.

So we had an expectation of what would happen because there were so many charts like NFLX that would make excellent shorts if they could just move a little higher essentially creating bull traps and handing off shares to weak hands. Then we got the signals that confirmed the gut feeling based on objective observation of market behavior, especially as it related to the ways Wall St. uses century old technical concepts against traders. I really don't understand why traders do the same thing over and over, it's so predictable that Wall St. uses it against them.

The second reason I'm using NFLX, is because I like it a lot as a core short or trending (long duration trade) position.

Yesterday and even this morning as I contemplated the "Buy the rumor, sell the news, I wondered how this would play out. These moves in stocks like NFLX or PCLN are so close, I don't see how Wall Street can walk away from them.

I don't want to draw conclusions for 2 hours of trade, but I do like what I see.

 Above is the trendline I expected NFLX to break above, if you read the two articles, there are a half a dozen reasons why this is not the bullish event it appears to be. Whether the size Wall Street firms trade in and thus need bulls to buy and bulls will buy a breakout to their buying creating enough demand that Wall St. can sell or short in to it without shooting themselves in the foot, to the concept of a "Failed move creates a fast reversal" which is essentially the "Bull Trap" concept most are familiar with, to the snow-ball effect that causes faster and faster downside as more longs sell on a downside reversal... This area is the short that is worth waiting for.

Of course there's confirmation of distribution once we get up there, although I feel that this move is high probability for the reasons above, the charts need to confirm that once we get there.

NFLX is way outperforming the market on a relative basis today so it looks like they are trying to get this done.

If you look at intraday charts they haven't done anything to spook bulls away from NFLX, in fact they've given them two bull flags and let them breakout to the upside as Technical Traders expect with no games at all. It seems to me they aren't going to do anything to spook tentative bulls. However for this to work, there needs to be a break out above the Tweezer top at $334.50, even an easy number to set a limit order at. Technical traders typically wait for price confirmation before they'll commit, so I'd set alerts > $334.50 and look for volume on any move crossing that area, at that point NFLX becomes a very interesting short for a longer term trade.