Another look at Netflix.

In this post I stated that NFLX shares were at risk of confirming an ending diagonal.  Since then, that risk did not materialize.  However, instead of breaking out, the shares have set themselves up for an even more likely ending diagonal breakdown than below. 

I was clearly noncommittal on the last call, pointing out the potential but preferring to take a wait and see approach.  But now that the chart has matured a bit I think the prior bearishness was warranted, if not a bit premature.  I mistakenly counted red 4 as part of the ending diagonal.

In any case, I think NFLX shares have now peaked.  In fact the first confirmation has already been given: the shares hit the top rail for "e" wave, broke through very momentarily and then came back down into the channel.  A break of the lower channel will be the 2nd confirmation of the trend change and I strongly suspect that it will happen.  Of course, nothing is true until it happens but my model gives this nearly 90% odds of playing out as an ending diagonal break down.  The resulting declining double top should be a warning to anyone with money in these over priced Ponzi Pump shares.  The de-confirmation would be if the shares can break out of the top of the channel again.  That would change everything.  I don't see it happening but who knows what the future will bring.

In any case, I like the Jan 15 $70 puts, currently at $1 on the ask (NFLX150117P00070000).  I don't recommend that people buy options.   There are many reasons for this including the fact that when the government and its crony capitalists are losing, the government just cheats.  Remember when the government con men disallowed shorting of the banks?  That screwed options holders big time.  Being right doesn't matter when the game is fixed.  But for anyone who might be tempted, treat it as a lottery ticket.  Gamble a few hundred bucks on a couple of contracts and hope for asymmetrical gains.  The odds are with you right here, right now.  Of course, this is not investment advice.  Buying options is not investing, it's gambling.  And I am not an investment advisor but rather someone who is mocking the entire financial system for being one huge gigantic scam.