4/12/2020 Stocks extend monster gains and jump over 10% this week. Futures point to a small opening loss on Monday. I’m thinking it’s more likely we move lower next week than up – and I plan to short Netflix (NFLX) as a hedge against my long positions.

Hi everyone, welcome back. Below is the weekly chart of SPY (S&P 500). 

The market jumped about 12% this week, which is a very significant bounce. I suspect the momentum could carry us up to 290 next week, but still think it’s more likely we move sideways or down a little next week than to continue higher. People looking to go long could buy shares near the 265-270 support zone with a profit target near 290 and stop loss about 10 below the entry point. 

I’m thinking about, and probably will short NFLX as a hedge sometime next week. The reasoning is that I’m thinking we the market could move lower and NFLX looks like it might want to drop from the resistance level here. It also acts as a hedge against my long positions in Boeing and MRO. Weekly chart of NFLX below. 

The current plan is to short a half position near 370-380, and to short another half (average “down”) in the 400-425 zone. I plan to cover in the 225 to 250 zone. My stop loss will be at around 450. Everytime I’ve shorted NFLX in the past as a short term trade hasn’t worked out, but who knows what will happen this time. 

Stay safe and see you next week.