NFLX Trade Set-Up/Follow Up...

This post from Jan. 28th shows the trade set up we put in place for NFLX to come to us on our terms, the trade set up and related posts are linked in this post, NFLX Follow Up.

From where we first started looking at NFLX for a trade set up, it has hardly moved, we are about +2.5% higher today than we were at the first mention of the idea and that idea was a set up, looking for some future events to occur including letting the trade come to us a bit more, but was also more or less the area that I expected we'd likely be looking at a NFLX short new or add to position, probably the most important part of being patient and waiting for the set up on the gap up on NFLX's cruddy earnings, was timing for the trade.

 The gap up was on earnings that were defined by price action long before anyone would have time to read the full earnings report and see the grey lining of the report. The gap up looked to me at the time and still does as if it were planned in advance because of the gap down and inventory held by professionals at that level that needed to be relieved (the gap in yellow), but as I had discussed in the linked NFLX posts and even before the earnings came out, often it's price action that determines the perception of an event and that is why I think NFLX was set up in advance and was going to gap up no matter how good or bad the earnings, perception rules the market at least with knee jerk reactions.


 This 2 hour chart shows the positive divegrence set up in advance of earnings. One of the things I wanted to see was for this 2 hour chart which was in line at the time, to go negative and it is starting to lead negative which can take some time for such a long term timeframe, but it is doing what I hoped to see.

 The 30 min chart also shows the advance accumulation/ set up and the distribution of NFLX which has been choppy, but range bound.

From the short term charts like intraday, today's action looks like NFLXX could roll over intraday from today's gains shortly, similar to the rest of the market and no support for any upside moves.

Here's the 3 min chart in the gap up range and it is deteriorating on a larger relative basis as well as intraday today.

As is the 5 min chart and through the range. We often see the strongest 3C activity in the seemingly most unlikely places like flat ranges with little movement otherwise.

This 10 min chart of NFLS is broadly negative, I'd like to see it hit a new leading negative low, but honestly at this point, I think NFLX is probably just about as good a position (short) as you'll likely get, it's the timing issue and that means the broad market updates, the Leading Indicator updates and the market ramping lever updates.

As soon as the broad market looks like it's done and it looks very close to that point now, I don't see anything that would hold me back from taking a good long look at NFLX as a short. Make sure you see the past posts that are linked in the post above, especially about their earnings.