Netflix reports earnings after the bell today. A key stock in the Fang technology triad, the stock has risen over 30 % since the Dec.2018 low.
When a stock rises by that much, in a counter-trend rally, back towards it's all time high above 400, expectations are seemingly thru the roof for this company which burns cash faster than most companies could accept in their business model.
Netflix this week raised monthly subscription prices over 10 %, for it's 79 + Million Subscribers, prior to earnings announcement this afternoon. I found the timing of that increase to be curious at best Are they burning cash at such a rapid rate, that they needed to get out front of their earnings , while the news was still all good ? And I mean all good.
Bottom line here is right now the market is betting on Netflix to come thru big time with a measurable upside earnings surprise, and rescue the bulls on the stock for their precinct buying.
However, if one looks at the Chaikin Money Flow Indicator, ( Shown Here ) which measures volume accumulation and distribution, that's buying and selling big money is clearly SELLING Netflix, as price continues to rise to the earnings announcement today. One heck of a divergence, wouldn't you say ?
Interesting. Isn't it ? And just one simple question...
Can a video streaming service,which is cash burning millions of dollars a day, save this market ?
This is the next earning's season after the comment above - I remembered it and, boy, you were right!
Netflix just plunged over -10% in less than a minute this evening after the bell and releasing its figures. People were not using it as an investment. The market used it - and I think Facebook too - to park money in for trading whilst. the market went mad, like a temporary gold-come-ATM account.
Facebook and Netflix were turned into the largest hidy-hole ATMs throughout the whole of human history the past couple of months as part of artificially floating the market, part of the spinning plates on sticks in the circus scenario - and the Netflix ATM was yanked out the wall this evening!
Facebook is next....
What a pair of robberies this could turn into!!!
gvoommen
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Great insights. We are still in a hope rally. Once the music stops, it will hit hard and fast :)
lapin_eliott
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as i warned, the combined fall of netflix and morgan stanley had not impact on spx, meaning its nature is intrinsecally bullish
SviCapital
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Whatever it takes man! Entertainment and Food are in demand since the day one of humanity. :)
lapin_eliott
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well now we can officialy claim that iphones and video streaming DID saved the market !!!!
UnsungTraderTV
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iPhones did not save the market... good luck streaming video =)
liberatedstocktrader
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I think it might be the pump before the dump, could be wrong, but just opened some 1 week put contracts. We will see.