Did NFLX Earnings Corral The Bulls?

2020-07-16 | Simpler Trading Team

After a week of grinding higher, this market roller coaster wavered to the downside the day before monthly options expiration.

The Dow closed at 26,734.71 points to fall .50% (dropping 135 points on the day). The Nasdaq dropped to 76.66 points for a .73% stumble while the S&P 500 was set back .34% to 3,215.57 points.

Simpler’s traders expressed how it’s “another crazy day” in a market that has frustrated many traders while opening up seesawing opportunities for others.

As the Simpler community hears time and again, much of the trading life is waiting for the right trade and when it comes along you pounce on it.

Depending on whether you prefer to position short or long in the market, this roller coaster has repeatedly presented trade setups.

Friday may be one of those fast-moving moments traders wait for with expiration hitting and the beginning of earnings reports from much-awaited “Covid” companies. These are Nasdaq technology stocks that have weathered and even advanced despite pandemic-infused setbacks the past few months.

Nasdaq and Covid darling NFLX took the lead in this stage of the earnings run when the movie streaming service reported second quarter finances after the close today.

NFLX beat revenue expectations, but fell short of analyst projections on earnings per share. NFLX added 10.09 million subscribers which beat the 8.26 million expected, yet the stock was down more than 12% after hours.

Expectations are that these “Covid proof” stocks will keep the market moving higher despite worldwide economic and pandemic issues.

But how will the NFLX earnings stumble affect the next round of second quarter reports?

Traders will be watching with great anticipation how Nasdaq leaders — including APPL, GOOGL, AMZN, and TSLA — will report over the next few weeks.

Simpler’s traders are being selective with trade setups and maintaining cash. Opportunities in the next few weeks will come quickly and the goal is to be able to pounce on the right setup.

We Saw: the market roller coaster take a downward twist — 

  • Down day stops mult-day rally
  • Nasdaq darling NFLX stumbles on earnings report
  • Expiration Friday arrives, more tech earnings coming

We’re Watching: fast plays with all the roller coaster twists —

  • Whether Nasdaq tech sector and Covid stocks hold up
  • Will NFLX stumble set tone for tech sector?
  • Setups in: GOOGL, NFLX, NVDA, TSLA, TDOC

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