NFLX: Buy the Dip or Avoid the Pain?

Published Apr 27, 2025

Sun, Sand, and Celebrating 50: A Milestone Birthday in Miami

As I stepped into my 50th year, I knew I wanted to celebrate in style – surrounded by the people I love, in a place that radiates joy and relaxation. Miami, with its pristine beaches and vibrant atmosphere, was the perfect backdrop for this milestone birthday bash.

The guest list was intimate, comprising 40 of my closest friends and family members. We settled into a beautiful beachside retreat, where days were spent lounging in the sun, playing cards, and engaging in lively debates about politics. The evenings were filled with laughter, good food, and great company.

As Saturday night rolled around, the party kicked into high gear. The dance floor was packed, and my loved ones showered me with warm birthday wishes. It was a night to cherish, with memories that will last a lifetime.

But amidst the revelry, I couldn't help but take a step back and reflect on my life. Fifty years is a significant milestone, and I felt grateful for the blessings I've received – wonderful kids, a loving family, and incredible friends.

As I looked back on my life, I realized that every decade has had its own set of goals and aspirations. In my 20s, it was about finishing school and launching my career. In my 30s, it was about building a stable life and making financial progress. In my 40s, it was about growing my family and nurturing my relationships.

Now, as I enter my 50s, I'm at a crossroads. I've achieved a lot, but I'm eager to redefine what success means to me. I'm ready to break free from the monotony of day-to-day tasks and financial concerns. I want to focus on what truly matters – spending quality time with loved ones, pursuing my passions, and enjoying life's simple pleasures.

ickleball and checkers, anyone? Yes, I’ve discovered a new love for these games, and they’re a great way to unwind and connect with friends. My wish for the next 10 years is to prioritize freedom, joy, and meaningful relationships. But in the midst of all the fun, I couldn’t help but reflect on what really matters, not just in my personal life but in my approach to trading as well.

As I think about my 50th birthday celebration in Miami, I’m reminded of an important lesson that transcends both life and trading: the value of pausing, reflecting, and realigning with your true priorities. Whether it’s in our personal lives or in the markets, we often find ourselves caught in the whirlwind of urgency. In trading, we might get swept up in short-term goals or the chase for the next quick win, overlooking the bigger picture. But as in life, success in trading requires thoughtful, deliberate actions—not just constant motion.

Just as I took the time to step back and reflect during my milestone birthday, traders must also recognize when it’s time to pause and evaluate their strategies. The most successful traders know when to step away from the screen, gather their thoughts, and gain perspective. This ability to reflect helps avoid the emotional traps of chasing rebounds or making hasty decisions. The journey to success, in both life and trading, is about finding balance, staying aligned with long-term goals, and understanding that the true rewards come from careful, strategic decisions. So, whether celebrating milestones or navigating the volatility of markets, taking a moment to reflect can bring the clarity needed to make wiser, more focused decisions.

As our group parted ways in Miami, many asked, "Why don’t we do this more often?" The answer is simple: life gets busy, and we forget to prioritize the things that bring us happiness. This birthday was a reminder that life is precious, and we should cherish every moment with the people we love—whether we’re trading or living, it’s about finding that balance and making the most of what truly matters.

Here's to the next chapter—may it be filled with laughter, adventure, and purpose!

RECENT TRADE REVIEW

This past week, I executed a $JPM option trade, leveraging the DPT (Dynamic Power Trader) services to identify a clear long opportunity. JPMorgan Chase (JPM) had been showing solid potential, and the DPT model accurately highlighted it as a prime candidate for a timely trade. If you want to dive deeper into the specifics of the trade, I encourage you to check out the recording from last Wednesday's live trading room session, where I walked through the entire setup and decision-making process in real-time.

One of the key differences between our paid and free services is the ability to receive SMS messages at critical moments. This ensures that you’re getting in and out of trades at the most opportune times, rather than relying solely on passive alerts or delayed notifications. For those who are serious about trading, this timely communication can make all the difference in executing profitable trades and staying ahead of the market.

For an in-depth look at the trade and to see how the DPT model works in action, be sure to watch the recording here: Live Trading Room Recording.

The $JPM trade was a great example of how combining a well-tested model with timely execution can lead to successful outcomes. If you're looking to improve your own trading, consider joining us in the live trading room for more insights and actionable trades like this one.

CURRENT TRADING LANDSCAPE

The stock market started the week under pressure, compounded by an escalating clash between President Donald Trump and Federal Reserve Chairman Jerome Powell. Trump's public critiques of Powell, including calls for his removal, added uncertainty to an already fragile market. These criticisms raised fears about political interference, which could undermine the Fed's independence, intensifying investor anxiety. Trump's assertion that Powell had been slow to respond to economic challenges contributed to a broad sell-off in equities, bonds, and the U.S. dollar. As a result, I’m currently in the market neutral camp, with the expectation that the market will continue trading on the downside in the short term. The SPY rally has the potential to reach the $500–580 levels, but short-term support is expected between $500–530 over the next few months. While volatility is likely to persist, the long-term trend remains under pressure. For reference, the SPY Seasonal Chart is shown below:

The previous week had already been marked by volatility, driven by a mix of trade tensions, mixed economic data, and a surge in market instability. The ongoing trade war between the U.S. and China remained a central concern. While tariff exemptions for tech products like smartphones and PCs briefly lifted market sentiment, the resurgence of semiconductor tariffs dampened any optimism. Jerome Powell's warnings about the long-term inflationary impact of tariffs added further uncertainty. Powell cautioned that these tariffs could stifle job growth and escalate inflation, complicating the Fed’s ability to maintain economic stability. Inflation data was mixed: the March Consumer Price Index (CPI) showed a modest year-over-year increase of 2.4%, while core CPI, which excludes volatile food and energy prices, rose 2.8%, signaling persistent price pressures.

As tensions grew, investors sought safety in gold, driving prices up more than 3% to surpass $3,400 per ounce, reflecting growing concerns about U.S. monetary policy and a sharp decline in the dollar. Meanwhile, corporate earnings painted a mixed picture. Netflix exceeded earnings expectations, providing some optimism, while sectors like healthcare and financials showed more cautious outlooks. UnitedHealth's major guidance revision sent shockwaves through healthcare, while JPMorgan Chase and Bank of America reported strong earnings, offering some relief to the broader market.

By midweek, market volatility persisted, with the VIX holding steady at 28 and major indices falling below their 200-day moving averages, marking a 20% pullback from recent highs. On April 21, the S&P 500 dropped 14% year-to-date, marking the worst presidential start in over a century. The back-and-forth tariff increases between the U.S. and China intensified, with China raising tariffs on U.S. goods to 125%, while U.S. tariffs on Chinese imports also hit 125%. This sent shockwaves through the markets. However, rumors of possible trade negotiations between the U.S. and China briefly boosted market sentiment on April 22, helping the S&P 500 and Nasdaq recover from earlier losses.

Trump’s attacks on the Fed's independence further compounded uncertainty, with concerns about the Fed’s credibility escalating. On April 21, stocks tumbled, and gold prices surged to new heights above $3,500 per ounce as investors flocked to safe-haven assets. Economic data, including a slight improvement in the Atlanta Fed’s Q1 GDPNow forecast and ongoing recession fears, continued to fuel market jitters. A Bank of America survey on April 17 revealed widespread concerns about an impending recession, further weighing on investor sentiment.

The Beige Book offered additional insights, reporting that international tourism was slowing and businesses were preparing for layoffs due to tariff-related uncertainty. While low unemployment and easing inflation suggested economic resilience, several Fed districts reported declines in economic activity, particularly in sectors most affected by trade tensions. With the VIX hovering near 28, the market remained on edge, with short-term fears dominating sentiment.

Thursday saw a slight recovery, with the tech sector leading the way as the Nasdaq rose 0.7%, and the S&P 500 gained 0.4%. Despite this, investors continued to monitor mixed earnings reports and trade developments. Tesla’s disappointing first-quarter results weighed on sentiment, while other companies like 3M, Lockheed Martin, and Verizon posted mixed earnings. However, ongoing concerns about the U.S.-China trade war kept the market on edge, with both U.S. and Chinese officials denying reports of resumed trade talks. This uncertainty contributed to a 2.5% increase in the VIX, signaling continued market instability.

As April draws to a close, the market remains fragile, shaped by a mix of trade tensions, political uncertainty, and mixed corporate earnings. The VIX continues to signal heightened fear, and volatility is expected to persist as investors digest further economic data and earnings results. While short-term rallies may occur, the long-term trend remains under pressure, with risks tied to ongoing tariff disputes, Federal Reserve policy, and recession concerns. Market participants are advised to remain cautious as these factors continue to shape the market outlook.

Looking ahead, next week promises to bring critical economic reports and earnings releases, offering key insights into the state of the U.S. economy and corporate performance. Economic reports include the ADP Employment Report, Q1 GDP update, personal income and spending data, and the PCE Price Index. Additional reports on manufacturing, the ISM Manufacturing Index, and employment data will provide further clarity on economic activity and labor market conditions. On the earnings front, major companies across a range of sectors are set to report, including Visa, Coca-Cola, Pfizer, Starbucks, PayPal, Microsoft, Meta, Qualcomm, Allstate, Yum Brands, Apple, Amazon, Eli Lilly, Mastercard, McDonald's, Berkshire Hathaway, Exxon, and Chevron. Investors will be closely watching these earnings for updates on consumer behavior, technological developments, and inflation pressures. With a packed schedule of reports and earnings, next week will be crucial for determining the short-term market direction and assessing the broader economic landscape.

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Sector Spotlight

As we navigate the current market turbulence, one sector has shown both resilience and vulnerability in equal measure, capturing the attention of investors and analysts alike. While broader market uncertainties and geopolitical tensions weigh heavily on market sentiment, this sector’s potential for growth in both the short and long term remains intriguing. Despite some headwinds, it continues to offer significant opportunities for savvy investors who can identify key players poised to thrive in this dynamic environment. Let's take a closer look at the Tech Sector, which remains crucial amidst ongoing trade tensions and economic shifts.

The XLK, the Technology Select Sector SPDR Fund, is another ETF that’s capturing significant interest. This fund includes high-growth companies like Apple, Microsoft, and NVIDIA, all of which are navigating the shifting landscape shaped by inflation concerns and trade risks. While market sentiment remains volatile, XLK’s composition of leading tech companies gives it the potential to perform well as the broader market searches for safe-haven opportunities. In the current trading landscape, the potential for a strong rebound in tech remains, especially as we approach earnings season and investor sentiment stabilizes. Both SMH and XLK have strong long-term growth prospects, particularly as technology continues to dominate global economic trends.

Trade of the Week

For this week’s trade, Netflix (NFLX) presents an excellent buying opportunity, particularly for investors looking to capitalize on both short-term volatility and long-term growth in the entertainment sector. Despite the market’s broader challenges, Netflix continues to demonstrate strong resilience and growth potential, driven by its ability to adapt and innovate in the highly competitive streaming landscape.

Netflix has successfully expanded its global footprint, with a growing international subscriber base that continues to contribute significantly to its revenue. The company’s investment in original content has proven to be a key differentiator, allowing it to build a unique and loyal customer base. As competition in the streaming industry intensifies with players like Disney+ and Amazon Prime Video, Netflix’s ability to maintain a leadership position remains intact due to its vast content library and ongoing investment in top-tier productions.

Additionally, Netflix's recent focus on improving profitability through price hikes and its ad-supported subscription model will likely provide future revenue growth opportunities. As the company works to enhance its profitability while continuing to build its content pipeline, Netflix’s long-term prospects remain promising.

In the short term, Netflix is likely to benefit from a rebound in market sentiment as earnings season progresses. Given the company’s strong fundamentals, it is well-positioned to outperform expectations in upcoming quarters. Support from AI-driven models also indicates a favorable outlook for Netflix, adding to the case for a strong buy in the current market environment.

In conclusion, Netflix (NFLX) is a strong buy for the upcoming week, driven by its resilient business model, global expansion, and content leadership. As market volatility persists, Netflix offers significant upside potential for investors looking to capitalize on a leading player in the entertainment sector. With support from AI models, NFLX’s growth trajectory remains positive, making it an excellent choice for investors seeking stability and growth in the tech-driven entertainment space.

This week, I’ll be adding Netflix (NFLX) to my portfolio!

And one more thing! Our track record speaks for itself from the standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain. Just take a look:

The consistent performance of our services is just incredible. My historical stellar performance is made possible by being right on 82.96% of all trades that I made, with an average profit of 37.84% per trade on our collective trade recommendations. To my knowledge, this trading performance is one-of-a-kind and stands alone in the marketplace for superior trading advice where our numbers and results speak for themselves.