OK, time for some self-flagellation. Let me set the scene: I was at Philz Coffee this morning, right at the opening bell and away from my computers (which is rather unusual). I was watching my positions, and the one that was really bugging me was Netflix (NFLX) which had climbed all night. I had September puts on it, and it was really going the wrong way. I tried to read the paper, but I couldn’t wait to get back to my machine and get the hell out of my puts, so I left. The moment I got home, I dumped my position at a loss. I think you know where this is going, because I’ve marked with an arrow the moment I dumped them:
Strictly speaking, I shouldn’t have been in the position in the first place, because it had long since violated its price gap, and there was no particular topping pattern to speak of. Thus, in my defense, I got out of a position that I shouldn’t have entered at all. What bugs me, though, is that as things are shaping up now, this is shaping up to be a fantastic short. As of this composition, NFLX had a big-ass bearish engulfing pattern, having blasted higher about $100/share for no particular reason. This thing is just itching to be knifed to death.
The longer-term daily price chart speaks to this point even more clearly. It’s possible that those puts will go up hundreds of percent.
Of course, the reason I’m stopping myself from going back in is because my brain is completely messed up with respect to NFLX now, and I’m convinced the millisecond I get back in, the stock will blast to lifetime highs. What a pisser. I just bet you this thing is going to plunge in the weeks ahead.
