Netflix in Pain: Why I Don’t Take Stock Into Earnings

SPX futures are -4 as we see many F.A.N.G.-type names and other tech stocks getting hit on NFLX’ revenue and subscriber miss.

The analysts had it right last week when they started talking down the sub estimates. Super high P/E stocks can’t go up 100%+ and then miss earnings. This situation is exactly why I don’t take stock into earnings. I use options since the risk is premium paid. 

I have no position and I'm proceeding carefully. It might be best to wait until tomorrow to see today's candle to make a fresh plan. Let's see if it puts in a 5-15-30-60 minute low. $343-$345 is an area to watch, and there is a big level to watch at $338ish.

Since we're talking F.A.N.G. names, yesterday I said this about AMZN: "If I was long it, I’d consider trimming because it’s a little extended here."

AMZN closed on the lows and it's down with NFLX today. See if it holds $1795. If not, the 8 day is all the way down at $1763.

Now let's turn to the SPX. Futures are -5 as tech is under pressure from NFLX. 

Today, let's see if we hold 2791. That could be difficult. If we break and say below, we have the 8 day at 2780ish, and then 2761 is a huge level.

If NFLX can rally off a low, that may help things. Also, see if some flows go to banks or energy to help mute the weakness.