NFLX Update

There's a very strong 5 min (the first institutional timeframe) leading positive divergence. A lot of members are interested in NFLX.

In my view, probabilities are good NFLX is putting in or has put in a base and will head higher, however as you know I always distinguish between probabilities and what I consider a HIGH probability TRADE SET-UP.

Here's what we have on NFLX and what I'd like to see before increasing long exposure w/ NFLX.

 The 5 min leading positive divergence forming after a very strong relative positive (arrow). This is not retail "Buying the dip". However, look at price, what does it look like to you?

I'm not saying "V" reversals don't occur, they do and typically because of some previously unknown fundamental event that has to be instantly discounted, I don't see Janet Yellen's 3 p.m. announcement as O's pick for most powerful woman in the world as an event that hasn't already been discounted. However as mentioned before, the NY F_E_D's trading desk may send out the minions to goose the market to give the impression of a favorable response to her nomination as she still would need to be confirmed.

 I personally (taking the "V" reversal out of the equation) would prefer to see a return to the lows, maybe a head fake move below them and at that point we have a little more reasonable foot print, but as I've said in the recent past, "Don't expect to see the kind of institutional support of long positions we use to see even a couple of months ago. These guys are not going to risk being the last one standing when the music stops with the market where it is now.

Still, I have to make my decisions and I'm still requiring a HIGH probability set up,  even though I can see a reasonable case for reasons that kind of set up is less likely.

SO WHAT IF I MISS THE TRADE! There's a bus every 10 minutes.

The 4 hour chart is a warning. NFLX went from confirmation of the uptrend to distribution. Normally there's be a much larger topping process, but I suspect (even though I have not had the time to do the analysis yet) that NFLX is going to act a lot more like a Channel Buster Position than a stage 3 top. For a review of a Channel Buster, see last night's Daily Wrap and SPX example.

If NFLX starts to look more like I'd like to see, I will of course let you know, but the probabilities are on its side