S&P 500 Tests Key Resistance as Dollar, Rates, Spreads Rise Ahead of Big Earnings

investing.com:

The S&P 500 finished higher but just stayed within the day before yesterday’s trading range, but technically, it finished up and increased by 28 bps.

Rates were also higher, as were the dollar and credit spreads. Typically, we do not see all four trading in the same direction, coupled with the VIX oddly moving lower.

But it comes down to which market to trust more, and typically, I always tend to trust bonds and currencies over stocks more, just because the value of rates matters much more to valuing stocks than the value of stocks to valuing bonds.

But at this point, the divergent moves between the CDX high yield spread and the VIX do not seem meaningful enough to matter. If the high yield spread shows signs of rising, the VIX will not be far behind.

Netflix (NASDAQ:NFLX) reported significantly better than expected results, with Net Additions blowing away expectations, coming in at 13.1 million versus 8.9 million.

It doesn’t matter that earnings missed estimates. What matters is the net addition beating and the higher-than-expected 1Q earnings guidance of $4.49 versus estimates of $4.09 per share.

The positioning in the options was so that the stock had to beat expectations by a wide enough margin to be propelled above $500; otherwise, calls would quickly lose value.

However, the results were good enough for the stock to rocket past $500. The shares are trading up 7% to around $525, filling the gap from January 2022.

People often get hyped or think that Netflix is some gauge for the rest of the “tech” sector; it is just not anymore.

Maybe in the heyday when “FANG” was the thing, but I feel things have changed materially since then, and it is just another company reporting results.

At this point in the game, Netflix is