With two bearish impulse legs on the hourly chart since Friday morning, Netflix gave us ample time to exit our small position with a profit of as much as $324, depending on which of the signals you heeded. Despite our short-term bull play, Netflix was a sitting duck ahead of Monday’s earnings. The earnings were great, as was the news that 630,000 new subscribers had come aboard. However, that didn’t stop the Wall Street crime syndicate that manipulates the stock for a living from sending it into a $30 dive after the close.
Once again, we should be grateful that we had no inkling of how good the earnings report would be. It should be clear by now that those who did have an inkling, and who logically assumed the news would drive the stock sharply higher, got sandbagged. However, you’ll want to keep in mind that no stock ever gets hit as badly as NFLX did yesterday afternoon unless there are white-shoed scumballs eager to buy it at salvage prices. Looking ahead, although it will be scant consolation to the widows and pensioners who dumped the stock in the throes of Monday’s 12% plunge, the plunge itself should be viewed as evidence that Netflix’s handlers intend to run the stock up again once granny has been shaken out of her shares.
Meanwhile, we must congratulate the aforesaid scumballs for concocting the ‘buying’ story that was used to push NFLX to recent highs near $270. The company was going to reap a fortune from its foray into Hollywood and the ‘content’ business. Or so the story went. There may be a profit in producing hit TV shows and movies, but if it were all that easy, then Disney would not be about to write of hundreds of millions of dollars in losses for its recent bomb, The Lone Ranger. We eagerly await whatever imaginative spin Wall Street uses to drive the stock upwards of $300.
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