Netflix Reaction Will Provide a Good Test for This Stock Market

 | Apr 16, 2018 | 4:46 PM EDT
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Monday was one of those days when the folks in the business media liked the action much more than the folks that actually trade it. On the surface the indices had good-sized gains and breadth was very strong at around 4,900 gainers to 2,050 decliners. New highs expanded to more than 150 and clearly it was a day of accumulation for the bulls.

What many individual market players complained about was the choppiness and inconsistency of much of the trading. This wasn't one of those days were stocks were steadily chased higher. My list of names that closed near their intraday highs was just a couple dozen, at most.

Beauty is in the eye of the beholder but for me the best-looking market is one in which I see technical setups that I think can generate some sustained momentum. I struggled all day to find stocks that I felt were positioned well for further strength in a good market and could barely find a thing I liked. Hopefully earnings will help to change that but I am skeptical of market's overall health for this reason and do not trust that we will see much more upside.

Netflix (NFLX) earnings are out and the initial reaction was slightly negative, but the company guided up and now the stock is trading up much more aggressively. It will be a good test of the overall market mood to see how willing buyers are to chase this news. The raw numbers were not that hot but the guidance is what they are buying. We need moves like this to hold if earnings season is going to produce some real momentum.

It is a tricky market for traders right now and the indices are not reflective of overall market health. Stay selective and manage positions carefully.

Have a good evening. I'll see you tomorrow.

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