The bulls continue the rally. Today is a large and busy earnings day with several companies beating, however, heavy-hitters DOW and MMM miss. Futures are positive perhaps anticipating a large beat by UPS which is easily the major earnings release today and for the week. UPS is a key global economic bellwether since shipping directly equates to the health of a recovery. MO and XOM also important. Jobless Claims are released at 8:30 AM. Natty Gas Inventories 10:30 AM. Manufacturing data is released, which has been weak, at 11 AM. Markets are typically bullish around the full moon and that is certainly the case yesterday into this morning.
Higher semi's and financials, and lower volatility, drive markets higher. The bulls will remain in the driver's seat with VIX below 14.15. Bears need the VIX to move above 14.15 to regain their mojo. For the SPX today, starting at 1579, the bulls need to touch 1583 and an upside acceleration should occur to fill the tiny one penny gap at 1588-1589, which is also last week's high. The bears need to push under the strong 1576 support and the downside will accelerate. A move through 1577-1582 is sideways action today. UPS earnings are key. Also watch VIX 14.15 as the main rudder for broad market direction today.
Anyone else watching NFLX as a short/put candidate? Huge gap up, this looks like an island reversal in the making.... $215, maybe the leap was short-covering?
ReplyDeleteNFLX is really tricky. They have spikes like this and it's hard to short them, because they can run for a while afterwards. Every time I've shorted NFLX it hasn't worked out well for me, but your mileage may be different.
ReplyDeletethanks Shane. Agreed, better to wait for a downtrend on this one, or move on to less risky pastures.
DeleteNFLX just had the huge spike from the earnings release this week, but, like AAPL, it is typically best to allow a few days for the smoke to clear. The negative divergence on the weekly chart is drastic, however, this upside spike has momo, so it may need a few days or week or two to burn off some energy at these elevated prices at 220-ish. The 80/20 rule says 180 should typically lead to 220, which it did, so that is satisfied. NFLX is likely a good candidate for the short side from this 220-230 area but probably best to wait a few days to see how it settles out, and there are many other stocks that are probably better plays. NFLX was the biggest gainer this year, still is likely, over 100% gain now 100 to 220, so it has lots of players messing around with it, sometimes these are best avoided. Note the congestion zone it is in now from August 2011 and this may serve as its ceiling moving forward, 220-230.
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