Market, SCTY, NFLX Update

There are quite a few interesting things going on and potential interesting trades.


The market averages still haven't confirmed, the closest has been the QQQ and it's starting to deteriorate on an intraday basis along with the other averages.

 DIA 1 min still never confirmed, it is getting worse on an intraday basis, recall the a.m. update the the roughly 3-4 different trading characters of the day, pre-market, the open to late morning, early afternoon to mid afternoon and from 3pm to the close, we don't typically see 1 trend, there are several throughput the day. This one looks to be weakening and TICK, although improved from the open, is still very weak . Also interesting is VXX and to a lesser degree, but still interesting is the VIX, neither, especially the VXX are anywhere near as weak as they normally would be based on their normal correlations, that taken with the rise in the premium being paid for deep out of the money put options via the SKEW index (as well as other things like the out-performance of Utilities) makes today very interesting for Put options and position add-to's or new positions, right now I'm specifically thinking about NFLX and SCTY. I'll get to those.

IWM never confirmed and is weakening intraday both in 3C and price rate of change.

 QQQ is second, behind the IWM, it too never confirmed even on a 1 min chart which is not unusual for intraday trade, it too is deteriorating intraday more so in 3C than price on this chart, but since this chart was captured, the Q's price ROC has fallen off considerably from this trend.

SPY never confirmed even on a 1 min chart, it's price ROC has diminished significantly as we near late morning trade/early afternoon.

The $USD/JPY is still in a leading negative divegrence, there was an effort to pump it earlier which failed, I suspect it's just a matter of time (hours) before this loses substantial overnight ground.

 SCTY...

We've now broken some important local support, but still don't have a positive intraday divegrence for a decent bounce which I'd consider using to fill out yesterday's partial short position. Trade Idea: (Swing Trade Plus) SCTY

 I think there are just VERY clear signals that SCTY was going to roll over from intraday like the 1 min of 3 min above, to longer charts all the way out to 60 min, below.

SCTY, but you can see the flat resistance range that would normally be head faked with a failed breakout above the range before a reversal to the downside, this doesn't happen every time, but I'd say a good 80% of the time, especially the more watched/traded the stock is. I'll stick with the partial position and decide what to do in filling it out as opportunities arise, I'm not chasing it lower.

NFLX was upgraded by Goldman Sachs last night I believe, the one thing you have to understand is the 99% of people trading this information are not qualified investors and thus will never be Goldman clients, the information they put out there is self serving. In fact of all the Goldman Trade Recommendations we have faded (took the opposite side of), I can't recall 1 that we didn't come out ahead on and their idea was stopped out, this isn't because they are dumb, far from it, they are using that to their advantage, such as a long rec'd trade, then they sell in to it. Do you really think Goldman who trades against their own clients are going to give out free trade information so you can trade against their position when there's nothing in it for them as far as new clients? Of course not, that's why trade after trade they rec'd is stopped out, but believe you me, they made money on it.

 So NFLX hasn't confirmed on the Goldman Gap up either, so I suspect they created demand for one simple reason, to sell in to it as NFLX was already sitting right at the top of a right shoulder.

I've put NFLX July (standard) $465 puts up on my quote screen and am looking for an area where I might execute this position.

This is NFLX on a 15 min chart with a clear as day negative, leading divegrence at the right shoulder, the yellow box is today and also exactly what a head fake move would look like, in this case it would almost certainly be a failed breakout and from failed moves come fast reversals, thus the put trade is intriguing.

I'll likely wait a bit longer until the 50-bar 5 min moving average is in the area of price before making a decision and as far as timing, a lot of intraday traders use the 50-bar on a 5 min chart so there may be some interesting signals around it.