Why Me, Worry? Says Ben (and Timmy and the Whole Crew)

This gotta be one of the biggest crap I've ever seen coming from Ben, Timmy, the whole PPT and TBTF Wall Street banks: to levitate the US stock market on a non-POMO day on a thin volume, after the massive earthquake in Japan and on-going and worsening turmoil in Libya and euro and the EU getting unhinged over debt crisis in PIG.

They've been throwing everything they've got on the market from the get-go.

The ostensible reason for today's gain? Because the oil price fell! Of course.

30 minutes to the close, Dow is up over 100 points, S&P500 up 13, Nasdaq 22.

US dollar is down big, gold, silver up, oil down, copper is up.

NFLX is still below 50-DMA (which sits at $204.03 today). For that matter, Nasdaq remains well below 50-DMA, despite today's advance.

NFLX Intraday - Hit 50-DMA and Turned Back

(UPDATE) So that you know, 50-DMA is $203.62. 200-DMA is $159.41. It's trying again to break above 50-DMA...

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For now. Still 2.5 hours of trading left, not counting AH. Volume is running higher than yesterday, though doesn't seem to correspond with a large price movement (up over $7).

I would put it, with a target at 200-DMA (currently at $159), but I don't have extra money in my account... Do your own DD.

Over-performers and Under-performers on Nasdaq

(UPDATE) AMZN, NFLX continue to weaken in the final hour, despite Nasdaq remaining strong. NFLX is back to flat. We'll see if dip buyers come in, oh let's say in the last 30 seconds?

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So the market gapped up on less than expected unemployment number and Venezuela's offer for mediation in Libya. Great. It doesn't matter that there aren't many job openings, and Libyan opposition has said no to the mediation. Oil and gold/silver selling off.

Nasdaq is the best performer today of the three major indices, up 50 points or 1.83%. I'm curious which stock is over-performing (going up more than 1.83%), and which one is under-performing. So, from my stock screen, here's the list:

Over-performers:

QCOM (2.87%)
ORCL (3.05%)
EMC (2.17%)
BIDU (1.97%)
RIMM (4.22%)
AAPL (1.90%)

Under-performers:

AMZN (1.01%)
EBAY (1.16%)
GOOG (1.48%)
NFLX (0.54%)
INTC (1.23%)
MSFT (0.70%)

AMZN and NFLX continue to be rather weak, even in rebound.

Overall market under-performers:

FCX (0.63% Dr. Copper is not doing too well.)
POT (0.21%

Contrarian Trade Success No.2: NFLX

(UPDATE) out @8.86, 1/27/2011. Good enough.

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IF the after-hour price ($202) holds tomorrow morning, that is.

After betting against Goldman on ISRG paid off big time, I was looking to put NFLX. It has had a phenomenal run, probably due for a decent-size correction. Their earning report on Wednesday AH seemed like a good enough trigger for that correction.

Then I read analysts' comments, and that changed my mind. They were almost all negative. I looked at the front-month options - more puts bought than calls. Then I looked at the chart. It wasn't great, with a recent correction, but I didn't see a negative divergence on technical indicators. The stock seemed to be building a base for about two months (ignoring a bump in mid January), as it worked off the MACD negative divergence from October to November.

Suppose it is a base that NFLX has been forming, and what would be the target price? I figured $205, to complete the right side of a cup. It if were to break out from the cup, the ultimate target would be $230 (cup depth plus breakout point). February 210 calls were selling under $3. I bought one at $2.84. All I would lose would be $2.84 x 100.

Barring unforseen disaster, it looks like I'll get my money back with some bonus.

Silicon Valley vs the Rest of the US

Or tech vs traditional. Or companies that continue to innovate vs companies that don't. I don't know how exactly to define it, but take a look at the comparison charts below. (They are 5-year charts.)


The first four are the tech companies, three in the Valley, one up in Washington. Netflix (NFLX) broke to all-time high today. Intuitive Surgical (ISRG), Apple (AAPL), and Amazon (AMZN) continue to break out from the high. Their charts say it all: Recession? What recession? Also notice that, except for ISRG, their recent bottom was NOT March 2009. They bottomed sooner than the rest of the market, and off to the races ever since...

Compare them to the rest. First two of "the rest" are tech companies, Google (GOOG) and Microsoft (MSFT). Even though they have recovered from their lows, they don't compare at all with the first four. (That tells me, unfortunately, GOOG has already become MSFT...) Rather, they resemble big, traditional businesses that are listed in New York Stock Exchange, rather than on Nasdaq. Their charts look more like J.P. Morgan Chase (JPM) or Coca Cola (KO). The last one is Freeport McMoran (FCX), a copper and gold company. Although it has recovered a lot, it is still far from recapturing the all-time high.

They (NFLX, ISRG, AAPL, AMZN, etc) are clearly in a bull market, disregarding the rest. In a bull market, you buy a breakout from the high. That's what I learned in the book by William O'Neil (How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition).

I am not advocating anything, going long or short, here. Do your own DD, but I sure wish I bought every single breakout from the high for these stocks.