NFLX April Favorite: Earnings

NFLX has been featured numerous times in April as a Trade Position Long, the primary trend is a different story, but through April NFLX has been one of the most talked about long ideas starting on April 1st with an Equity Long in the trading portfolio at 2/3rds size position with some room left to add because I thought a run below $349.90 on a head fake stop run was a high probability, that happened...NFLX was mentioned again on April 3rd with the same look-out for the head fake move, in fact from April 3rd's post...

"I would personally leave some room for a stop run/head fake in the area of about $349.90. In fact, if you want to place a high standard on the trade idea and get the best entry/lowest risk, you might consider setting an alert for <$349.90 and consider that the make or break for a long entry."

Here's the chart with the original trendline from early April...

After the original post the April 3rd post said...

"I would personally leave some room for a stop run/head fake in the area of about $349.90. In fact, if you want to place a high standard on the trade idea and get the best entry/lowest risk, you might consider setting an alert for <$349.90 and consider that the make or break for a long entry."

The head fake came the next day at the yellow arrow on 4/4 below our minimum target, the model trading portfolio filled at $360.90 before the head fake move, thus tonight it's at a $12 profit at last check at $371.15.

Other dates NFLX was brought up as a long position: April 7th April 9th  April 14th

And the chart that brought NFLX out and above the rest...

Leading positive out to 30 mins.

Of course this sets up a whole new trade in the primary trend category as a core position because this 4 hour chart ISN'T GOING ANYWHERE...

NFLX 4 hour, but we'll cross that bridge when we get there... (again).

As for relative performance on intraday timeframes, 

 3 min NFLX intraday is showing much better underlying trade than the averages like...

The SPY in the same timeframe.

I imagine NFLX will likely target the areas north of where we first picked up positive divergences, in fact in AH, it already has.

Best of luck to our NFLX longs.

AAPL P/L Follow Up

I mentioned earlier I might close the AAPL long trading position and that I'd likely be looking at it again in the not so distant future.

I decided to close the position....Closing Out the AAPL Trading Position

As I said, it was more defensive, not to protect gains. Here's the P/L...

QQQ Put / Market Pullback Follow Up

The reason for opening the QQQ May Put (the expiration is just how I like to do things, 2-3x longer than I think I could possibly need) wasn't just the signals from last Thursday (holiday shortened week) that were posted in EOD Update for Next Week or what I wrote in that post as far as expectations that said it looked to me like we could expect...

"My initial impression is we get a pullback early next week, I want to say Monday, but there may be a little more work to do before we are there"...

With the charts looking a bit strange, not the normal migration of a divergence (again I believe that's due to what has been very low equity volume all day), but it really came down to confirmation, not just in the QQQ, but all of the averages, the Leading Indicators, Futures, but within the Q's themselves, here are just A FEW of the MANY charts I looked at for confirmation...each will trade roughly the same as their price/leverage relationship to the Q's dictates, but with 3C it's also a lot about the volume and as such, if there isn't something truly going on, we don't see confirmation between assets like the underlying and maybe a 2x inverse or 2x long.

Again, these are just a few of the charts, if I posted them all we'd have 40  or more just for the Q's.

QQQ

 1 min intraday negative, this alone wouldn't be enough by far.

QQQ 3 min intraday negative divegrence, even with this it wouldn't be enough to open a position (and I do think this is likely a pullback as mentioned last week, I think there's a very good chance we'll have some longs to enter soon for another quick trade as mentioned earlier when closing AAPL)...

 However when I am seeing 10 min negatives like this, I have to take that seriously, especially for what I expect to be a pullback-type move.


*The character of underlying trade during a pullback move will have immense amounts of information as to what we are looking at next and the larger trends some of us are already in to.

 With a 15 min leading negative like this, I'm almost obliged to take a short/put position, but I was still cautious because of volume and some anomalies on the charts so it's off to do what I encourage you to do as often as possible, Compare.

 This is QLD,  2x leveraged long QQQ at 3 mins with a leading negative divegrence. This chart confirms what I'm seeing in the QQQ.


This is the QLD 10 min chart leading negative, again, confirming the signals in the QQQ.

This is the 10 min QID, 2x inverse or short QQQ so it should give the exact opposite signal and it does with a leading positive divegrence.

I could go through every timeframe of every one of these and there's nothing but confirmation and it doesn't just stop at 10 mins...

 15 min leading negative in QLD, same as QQQ and...

15 min leading positive in QID , the inverse of QQQ and QLD...

And the 3x leveraged...

 TQQQ is 3x leveraged long QQQ with a leading negative 10 min chart confirming EVERYTHING above.

And SQQQ, 3x inverse/short QQQ with a leading positive also confirming everything above. 

And it's not just the 10 min. timeframes, as I said before, if I posted all of them for each asset I'd have 40+ charts.

The reason I felt okay with puts even though at the moment the market was seeing some downside and I don't like to chase downside with puts/shorts, I saw the NYSE TICK that looked as if we'd see a little EOD bounce... This made it easier to enter those positions without chasing...

 NYSE TICK data was trending up toward the close so entering a put wouldn't be chasing, the premiums would still be reasonable...

As you can see by the EOD action in the Q's the TICJK trend, as usually is, was correct.

The Index Futures look good asThursday afternoon for the start of this week.

As I was saying last week, "We use to trade the 5 min signals alone and we've had success with short term trades with the same 5 min signals recently". This is the NASDAQ 100 5 min Futures... leading negative.

There's no sure thing in the market, there are probabilities and this looks like a high probability/low risk set up, this is a hard one to ignore.

Opening Speculative QQQ $87 Put

This is the standard monthly. I would not be opposed to using QID (2x short) ETF or SQQ the 3x short version either.

Closing Out the AAPL Trading Position

There are just too many larger divergences, even without the kind of migration we should normally see (which I think is because of the low volume today), it's just not worth the risk to me here, especially with a 15 min negative right at local resistance.

15 min AAPL.

Because of the positive from last week, I suspect I'll be looking at this as a long again soon.

And there we go...

For now I'm still leaving things as they are, although if we get a bounce intraday I may consider that Put. If I was looking to add something like a leveraged QQQ short I'd have no problem entering something like QID or SQQQ here (2 and 3x leveraged inverse or short QQQ) long HERE.

Market Update

Today is one of the stranger days I've seen. As far as expectations on Thursday afternoon for the new week, we are on track, it's just the way they are happening are odd, I think this has to be due to the low equity market volume. Instead of seeing normal migration of a divergence, we are seeing some strange negatives in some heavier timeframes than I'd normally expect, that would fit with selling/distribution in a low volume environment.

Right now I'm sticking with the VXX calls and SRTY long, although if I had to choose an asset today, I might choose SQQQ (3x short Q's) or a QQQ put.

Leading Indicators are off today as well as would be expected from what we were seeing late Thursday and expectations for early this week.

Here are some examples (however for now, I'm going to hold positioning unless I see something that's really screaming or jumping off the charts).

*With central bank interference fading, I'm reminded of the market maxim, "Stocks need volume to rise, but they will fall of their own weight", meaning they'll fall on light volume.

 SPY 1 min intraday seems to be inline, but...

 The 3 min chart continues to be in bad shape, however this isn't even what I was referring to above.

 My custom NYSE TICK Indicator looks like it's tracking volume, it's tracking TICK data, more and more stocks are selling off or falling than rising over the last 3 days.

And specifically today...

Meanwhile the actual NYSE Tick data is about as flat as you get in a very moderate range of +/-750

This is the QQQ 1 min intraday, NOT in line

QQQ 3 min negative

The 5 min is kind of interesting as it is moving somewhat inline intraday, but from a leading negative position as if some larger orders (sell) are skewing things in the low volume environment.

At 10 min it is very evident on the Q's, this is why I said I'd likely chose a QQQ short for a pullback trade, but something else bigger may be brewing here.

 Look at the leading negative on this QQQ 15 min, that's pretty far out there for such a fast move.

IWM intraday so I'm not unhappy with the SRTY long from Thursday

3 min IWM

And even the 10 min IWM is starting to go negative, but not the normal migration/divergence pattern, just like block orders are skewing the signals. Also note the reversal process.

 As for short term VIX futures, this is the intraday action, you'd never think it looking at price alone and the VIX is where the volume is vs the broad market today.


3 min leading positive short term VIX futures

And look at this oddball 15 min positive....

The intraday real VIX futures are positive today as well.

The USD/JPY 5 min is still giving a very ugly signal.

And the $USDX intraday is still giving a very ugly signal, it makes me wonder how long the USD/JPY can hold up.

As for Leading Indicators, High Yield Corp. Credit (HYG) is diverging BADLY with the SPX, no support coming from there.

Both sentiment (pro) indicators are selling off badly vs the SPX, either 2 days or the other is at 3+ days.

Yields are disconnecting to the downside, they act as a magnet and pull equity prices toward them and commodities are also disconnecting with the SPX to the downside.

It's a strange day, I'm going to keep the positions for a pullback in place, but wait before I add, although if I do, it may be in a QQQ put.

I have a few more assets/currencies to look at, but this low volume is really making this an odd looking day.

AAPL Follow Up

*Just as a general note for the overall market this morning, things seem rather dull*

AAPL is currently an open Trading portfolio (tracking) long position and I'm trying to decide what to do with it as I think it has some upside based on the "W" formation of the last approximately 2 weeks, but also the recent pullback signals and AAPL happens to be at a resistance area. If I were looking at this as a swing trade and not that interested in trading around it (especially with a smaller account where transaction costs  become more of an issue), I'd probably take no action.

However, I suspect the same "additional work" I talked about Friday in reference to a market pullback ...

"My initial impression is we get a pullback early next week, I want to say Monday, but there may be a little more work to do before we are there"

may be the deciding factor.

 This is a larger view of the 1 min AAPL chart with a larger relative negative divegrence, remember a relative divegrence is the weaker form, but its size is what gives it some credibility for a short term pullback.

 This is the same chart looking at Friday and this morning thus far, again, a relative negative with a bit of a leading negative component developing intraday.

 This is the 2 min chart, in line with the overall market, especially signals after 2 pm on Thursday afternoon...

Here we have a positive that launches this move in AAPL, in line at the green arrow and a relative negative on the 3 min chart, I suspect the answer to, "What will I do with the AAPL trading position?" will be answered as the day goes on, which is also what I'm looking at for the broader market and whether it makes sense to add to positions opened Friday or perhaps even new ones.

This is where AAPL becomes more of an interesting question...

 The 5 min chart is showing a larger base, an in line status on the initial move and a very small relative negative divegrence, if this were to develop in to something larger, I'd probably close the AAPL long, wait for a pullback and re-enter, it is at a small profit now, but only a couple of percent; it's more about playing defense.

 The 10 min chart of AAPL shows the "W" formation that has what appears to be a head fake in place (to most it would just look like a lower low, but the increasingly positive divegrence suggests a "W" base that saw a stop run, this is also in line with the broad overall market. We also have a leading positive divegrence to the far right.

These charts are what make the short term question a bit harder and why I would likely just hold AAPL long if I were working with a smaller trading account or if I didn't have as much time to pay attention to the market.

*The move under the yellow trendline would be considered the head fake move of the "W" base.*

At 15 mins the AAPL chart shows good divergent signals that worked out well, there's an unresolved positive divegrence (at the "W" area) to the far right.

Like the rest of the market today, the short term question of AAPL and the possibilities it brings such as a new position (long) for those interested on a possible pullback in AAPL, look like they are only going to be resolved with a little more time as I suspected Thursday afternoon.

Futures Update

As I said in the last post, I think early action this week is biased to the downside enough that it is tradable, the divergences started Thursday afternoon on last week's shortened holiday trading week (closed Friday) and as we have seen so often, the EOD signals tend to pick up where they left off on the next trading day, even over a 3-day weekend... the charts I just showed of the averages (ETFs) made that clear, but it may be the Futures and particularly the USD/JPY that are even more damning in sending the market lower early this week (as I said Friday, early Monday the market may need to put in a little more work before a move down which could open the door for a larger move down if the signals deteriorate even more and migrate to 5 min charts).

On the economic front overnight Japan did release more evidence that the BOJ's policies led by Abe-enomics are a total failure as Japan posted the largest Trade Deficit EVER! Russia also came out and said they may enter a "technical recession" this quarter, a recession is considered to be 2 consecutive quarters of negative growth or negative prints. The apparent culprit for Russia? Capital OUTFLOWS and "Contracting GDP".

Any market downside will probably be blamed on one of those two things (although the signals were there clearly before any such news was made public (wink, wink to the High Frequency Traders and Goldmanites)....

A third event that may be blamed (which also didn't occur until after the signals were firmly in place Thursday afternoon) was the re-escalation of tensions in Ukraine with 5 people being killed this weekend at a Pro-Russian gathering in the Pro-Russian controlled eastern Ukrainian city of Slaviansk when it is reported that 4 cars of "ultra Ukrainian nationalists" opened fire on a pro-Russian rally. Apparently 3 Pro-Russian checkpoint guards were killed and subsequently two of the "alleged" ultra-Ukranian nationalists attackers. I say "alleged because this event comes on the heels of Putin admitting for the first time, that Russian tanks/forces positioned on the eastern Ukrainian border would have the green-light to roll into the Ukraine to protect the separatists that Putin says are being "Targeted by their own government". 

For Ukraine's part, the SBU accuses Russia's GRU (Military Intelligence) of not only being in Slaviansk, but orchestrating the attack as an excuse for Russian forces to roll in to protect ethnic Russians, basically the "Crimea" playbook with a bit more bloodshed already.

I doubt any of these events are connected to the signals from Friday or the decline/[pullback I'm expecting early this week, although escalating circumstances could certainly have a snowball effect.

As for the Futures charts...

 ES 5 min leading negative

 NQ 5 min leading negative

TF 5 min leading negative

VIX Futures intraday going positive

VIX Futures 15 min Leading positive

Very rarely do we get FX "pairs" signals beyond 1 min, sometimes 5 min, this is the USD/JPY 5 min with a deep, recent leading negative divegrence.

This is the 1 min $USDX with a long overnight and Monday a.m. leading negative divegrence, when the $USD falls it pressures the USD/JPY lower which drags index futures lower and the market averages lower.

As I said Friday, I think we see a pullback early in the week, maybe today, but it looked Friday as if it needed a little more work before.