To The Moon

I'll have a week off next week, so I'll check to see if there's a crash next week.

Conclusion first: The market could fall back to where it was in late December in the next two weeks.

It starts with Netflix's options activity.

Today, Netflix announced its Q4 financial results, which beat expectations on a number of numbers, especially net subscriber additions of 7.66 million, far exceeding market expectations of 4.5 million. Shares were up 6% at 335 in the premarket.

Looking back at the options move on the day before earnings, I found this pair of orders:

• sell $NFLX 20230421 360.0 CALL$ $NFLX 20230421 360.0 CALL$ ​
• sell $NFLX 20230421 290.0 PUT$ $NFLX 20230421 290.0 PUT$ 

It's not common for a company with volatile earnings like Netflix to have options sold double before earnings. This pair needs to pay attention to two things, the strike price range and the option expiration date.

The put strike price of 290 was near the bottom in December, while the call strike price of 360 was near the price before Netflix reported last April.

Both options have exercise dates through April, Q1 earnings season.

So this is not just a simple gambling financial strategy, but across the Q1 market strategy. For Netflix's seemingly healthy earnings report, the trader's Q1 forecast is that it won't fall past December's lows, but it won't rise past April's lows either.

For companies whose numbers look good, I think this is the quarter.

For companies with poor earnings numbers, I think the lows will probably go back to October.

Similarly, I found that someone was secretly buying Amazon put, because he was afraid of being identified as a big order, he bought four separate times: $AMZN 20230210 83.0 PUT$ $AMZN 20230210 83.0 PUT$ 

The option expiration date is Feb. 10, and the strike price of 83 is also near the December bottom.

A pullback to the bottom of December is not inconceivable, FANNG any one of the earnings problems, the correction in place.

Could it happen next week? Not necessarily. It could be the week after next.

One last lottery ticket, a call from a clinical biotech company$89Bio, Inc.(ETNB)$ : $ETNB 20230421 20.0 CALL$ $ETNB 20230421 20.0 CALL$ 

Clinical results are expected in the next quarter.

I wish you all a happy Spring Festival!