After the monster US inflation beat last Friday, the market was routed. USD was bid, Rates were off, Equities were falling. Until the US Fed meeting on Wednesday, we expect this trend to continue (and maybe even made worse by the Fed). Therefore, we are entering several bear trades across asset classes:
Big tech is always going to be hit hard, and Netflix is a good example here. The share price fell 5% on Friday alone. At $182, it might be down 60%+ over the past year, but we think this could continue lower next week. We’re targeting $166 as a first key support level on the downside.
This looks a really appealing trade on both the technical and fundamental picture. Technically, the daily candles look ominously heavy, with an overhang that looks to move lower to target year to date lows a few cents lower. Fundamentally, the ECB weren’t that bullish last week, so we think it’s a good choice to short here and buy USD as a safe haven. We’ll be short at 1.0500 targeting 1.0400 as a first stop, with new lows potentially beckoning on a key week.