Trade Reiteration : NFLX (Short)

I'm putting this one up again although I just filled out the position Tuesday, Trade-Idea: Bringing NFLX Trading Equity Short to Full Size.

There are so many great looking charts from the H&S to the proportionality of the stages, the volume confirmation of a H&S top and 3C divergences across the board in every timeframe, NFLX has to be one of my favorite non-ETF short trades and since it's still in a very favorable shorting area with much lower risk as well as at the 2nd of only 3 areas I'll short a H&S top, it's really as close as I've seen to a stellar position. NFLX even popped up on my Custom DeMark-inspired Indicator scan earlier this week Scan Candidates and Results of Last Night's DeMArk (inspired) Custom Indicator Scan.

I'm just going to put the charts out there agin without too much commentary as they have been covered numerous times (except where I feel there is a concept that is broad based and can be used with other assets in multiple timeframes).

 This looks like a H&S top, it takes volume confirmation though to make sure, in 2010 there was a market based H&S looking top that everyone was talking about, but no one seemed to confirm and after approx. 9 months of short selling excitement, it took off to new highs, if they had confirmed the volume, they would have seen it was a false or random price pattern.

If you look at enough reversals, you'll notice it's a process rather than an event, institutional money moves the market and their positions are so large, they simply can't move in and out like we can.

 This is a custom indicator I threw together real quick so it's easier to see the trends in volume. I've already shown you the entire pattern's trend and it's exactly as it should be. This is the right shoulder rally, volume should fall off in to the rally, you can see that happening by the volume bars alone, but the indicator makes it crystal clear.

 I've posted the daily 3C charts for NFLX that went back to the 2012 stage 1 base, I figured I'd show a longer view as NFLX has been through all 4 stages before. @007-2008 were stage 1, you can see 2, 3 and 4 from there. The 2011 top wasn't what I'd call a H&S top, at least not a clean one.

This is a closer look at the current pattern using the same multi-day 3C chart I used above, the 2012 base is clear, mark up is confirmed and a sharp leading negative at the H&S top, in fact right at it.

As far as the other charts, you've seen the 1-day negative, we have a 4 hour which is large enough to print a primary bear trend.

The 60 min on the right shoulder which was PERFECTLY in line with price, this top of the right shoulder being the only significant divergence on the chart and a very strong timeframe or larger underlying flow (distribution).

The great part about the 3C charts is the confirmation across all timeframes, 30 min above.

15 min

10 min

And as we transition from the strategic timeframes to the tactical /entry timeframes...

5 min and right in the area I was talking about last week when on Friday I said I thought NFLX needed a few more days to make the reversal process mature, rather than an event as we saw in MCP, even though that's comparing apples to oranges because of the size of the preceding trend and two totally different price pattern concepts.