4/17/2020 Stocks continue rally this week largely due to the technology sector. I’m still thinking it’s more likely we go sideways or down next week than up. I didn’t short Netflix this week.

Hi everyone, welcome back. 

Let’s take a look at Netflix’s weekly chart since I was originally planning on going short this week, but changed my mind once I realized that it is going opposite the market. It would have been used as a hedge against my positions in Boeing and Marathon Oil, but since it goes opposite the market, I would actually have to go long Netflix to hedge my long positions.  

The plan was to short a half position near 380, and another half position near all time highs in the 400-420 zone with a stop loss just above. If I took the trade, I would have been stopped out near the highs at 440 and whipsawed. 

Below is the weekly chart of SPY with resistance levels marked. I’m thinking any weekly close above the 295-300 zone means we are likely to test all time highs. However, I think there’s a good chance the index will get stopped in the 295-300 zone and drop back down to the 260-270 zone.

So although I think it’s more likely we go sideways or down next week than up, the momentum could easily carry us another 5% higher before there’s any sort of meaningful pullback. I’m still long Boeing and Marathon Oil, and don’t plan to sell below $240 and $11 respectively.