Netflix Screws The Pooch

Tale of the Tape

Good evening folks. Stocks closed modestly lower today. None of the indices fell more than .72% so it was a yawner.

Tech stocks were weak again today which is a recent trend we’ve been detailing all week here on The Rip.

We drew the chart below to track this tech underperformance and identify where a trend break might occur.

It shows the ratio of tech ETF $XLK to S&P 500 ETF $SPY. Tech has been trending higher relative to the broader market  and despite the recent weakness, there is still some room before that relative trend is broken.

Netflix is getting wrecked after hours on its earnings report. 

See more below…

S&P 5003,215-0.34%
Russell 20001,467-0.72%
Dow Jones26,734-0.50%

Earnings Round-Up

Netflix reported earnings after the close and the numbers didn’t come out so hot.

EPS: $1.59 vs $1.81 est.
Revenue: $6.15B vs $6.08B est.

The stock dropped 12% after-hours on weak subscriber growth guidance for Q3 despite adding 10M subscribers this quarter. 

The company announced Ted Sarandos as new co-CEO and member on the Board of Directors. Best of luck to the new team.

$NFLX is still up an impressive 62.83% YTD.

Here’s the press release.

Domino’s Pizza reported second quarter earnings prior to the market open and golly were they impressive. Revenues were up 13% while Net Income jumped 28.5%.

EPS: $2.99 vs $2.28 est. 

The kitchen must be poppin. 

Here’s a run down from Investors Business Daily.

$DPZ closed down 1.5% today, but it’s still up ~40% YTD.

Stocktwits After-Hours

Here’s episode #2, let us know what you think. 

Today we touched on $NFLX & $DPZ earnings, $SPCE the last frontier, and much more.

Check it out here and don’t forget to subscribe. We need help with those pesky algorithms. 😉


Draftkings has been a beast this year rising 400% after getting public via SPAC

Since hitting highs around $43 in early June, the stock has given a chunk back, dropping below $30 by the close yesterday.

Welp, today the stock jumped 9.46%. Maybe this is just a quick bounce before resuming the recent downturn or maybe the move is anticipating the return of pro sports later this month. Place your bets… 

Signs of Froth

Despite the insane rally, skepticism has remained high as traders are fed an endless litany of things to worry about by the ravenous financial news media.

Finally though, we are beginning to get some signs of froth.

Bloomberg published a sharp piece today highlighting the types of bets traders are leaning into.

In Amazon, the ratio of way out of the money call buying to at the money call buying is rocketing.

In effect, traders are taking way more bets that $AMZN will go much higher than usual. Very bullish sentiment.

In Chinese Equity ETF $FXI, Skew is setting records. Here’s the cool chart:

And here’s the money explanatory quote,

Traders are also chasing fresh upside in Chinese equities after the country’s influential state media stoked bullish enthusiasm. Call skew, a measure of the implied volatility of calls versus puts, has jumped by a record for BlackRock Inc.’s iShares China Large-Cap ETF, or FXI, according to Credit Suisse.

“The last time we saw such a dramatic bid for upside calls was in April 2015, after FXI surged 24% in a month, leading to an euphoric chase in the options market,” Mandy Xu, equity derivatives strategist, wrote in a note. “Unfortunately, the rally proved to be short-lived, with FXI falling 3% in the month after and over 20% in the following three months.

Have a read here on Bloomberg.

Earnings Tomorrow

Be sure to know when your stocks report earnings. Here’s the full earnings calendar.

Links That Don’t Suck

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📈Traders Set Record Bets on Amazon, Chinese Stocks Jumping Higher 

🏈 Details On The ‘Bombshell’ Redskins Story

🥘 An Annuity Salesman and John Gotti Held a Free Dinner

🕌 Inside the Epic Effort to Save Bhutan’s Wangduechhoeling Palace
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