October 21 Morning Watch
Good morning, everyone. Netflix and SpaceX have reported, and their stocks are moving in opposite directions before the open. Netflix is lower despite stronger quarterly profits. SpaceX is higher after rapid growth, but the scale of its spending deserves just as much attention. We'll work through the results and the charts, then come back to SPY, QQQ and Tesla ahead of its own earnings.
SPY: defend the fifty-day reclaim
October 21 premarket observation: $769.25 (+0.03% versus the October 20 regular close of $769.05). Completed-session 20-day SMA: $770.62; 50-day SMA: $768.29; 200-day SMA: $725.87.
Start with the market backdrop. SPY finished Tuesday around seven hundred sixty-nine dollars, above its fifty-day average near seven hundred sixty-eight, but below its twenty-day near seven hundred seventy-one. In our early premarket snapshot, it was still around seven hundred sixty-nine, little changed from the close. The first question is whether Tuesday's reclaim can hold through a daily retest and a close above. Above that area, Tuesday's high near seven hundred seventy-two becomes the next reference. If the reclaim fails, Tuesday's low near seven hundred sixty-four matters below.
QQQ: the next recovery tests
October 21 premarket observation: $719.02 (+0.19% versus the October 20 regular close of $717.63). Completed-session 20-day SMA: $739.87; 50-day SMA: $726.62; 200-day SMA: $675.95.
QQQ were around seven hundred nineteen dollars before the open, modestly above Tuesday's close near seven hundred eighteen. That's still below Tuesday's high near seven hundred twenty-three and the fifty-day average near seven hundred twenty-seven. Those levels have different jobs: the high is the nearest completed-session hurdle, while the average is the broader recovery test. Tuesday's low near seven hundred ten is the downside reference if the early bounce fades.
The bigger picture is still a decline of about six-and-a-half percent from the October sixth closing peak to the October sixteenth closing low, followed by a rebound of only about one percent through Tuesday. This morning's premarket rise is separate from that completed closing history. QQQ remain above their two-hundred-day average near six hundred seventy-six, but that longer-term position doesn't erase the shorter-term weakness.
Netflix: profits and forecasts point to different tests
October 21 premarket observation: $64.22 (-6.51% versus the October 20 regular close of $68.69). Completed-session 20-day SMA: $69.97; 50-day SMA: $74.85; 200-day SMA: $82.65.
Now Netflix. It was around sixty-four dollars before the open, about six-and-a-half percent below Tuesday's close. That's also below the October second closing low this year, near sixty-seven. The chart had already suffered an approximately fifty-percent closing decline from June last year to that October low. Its separate rebound through Tuesday was only about two-and-a-half percent. This morning's quote puts that small recovery under pressure, but it isn't a new completed daily candle.
The first recovery reference is that earlier closing low near sixty-seven, followed by Tuesday's low around sixty-eight. If the stock stays underneath those areas during the regular session, they remain levels to reclaim. A move back through them would improve the immediate picture, but the twenty-day average near seventy and the fifty-day near seventy-five are still overhead. I want to see a daily retest and close above a reclaimed level before calling it confirmation.
The earnings themselves were stronger than a year ago. Netflix reported revenue of about twelve-point-nine billion dollars, up roughly twelve percent, and diluted earnings of eighty-seven cents a share versus fifty-nine cents. Operating margin was thirty-four-point-six percent. But the company said some of its performance against its own margin forecast reflected expense timing. A strong reported quarter and a durable improvement are related questions, rather than identical ones.
The outlook adds another test. Netflix lowered its annual advertising revenue forecast from about three billion dollars to two-point-seven billion. Its free-cash-flow forecast fell from twelve-point-five billion to about twelve billion, primarily because of an expected fourth-quarter real-estate transaction. Those are company forecasts, not cash already earned. The report gives us stronger profits alongside lower expectations in two important areas. Price alone cannot tell us how much weight investors put on each part.
SpaceX: early recovery and the investment burden
October 21 premarket observation: $159.38 (+7.84% versus the October 20 regular close of $147.79). Completed-session 20-day SMA: $154.70; 50-day SMA: $148.62; 200-day SMA unavailable with only 90 actual sessions.
SpaceX was around one hundred fifty-nine dollars in the premarket snapshot, almost eight percent above Tuesday's close near one hundred forty-eight. That puts the observation above its twenty-day average near one hundred fifty-five and its fifty-day near one hundred forty-nine. It is an early improvement, with the regular session still ahead. The question is whether those reclaimed areas can hold through a daily retest and a close above, while keeping the early premarket move separate from a completed recovery.
SpaceX has only ninety completed trading sessions, so there is no two-hundred-day average yet. Its earlier closing decline from June's peak to August's low was almost forty-nine percent. The separate rebound through Tuesday was about thirty-six-and-a-half percent. Both belong on the chart; this morning's higher quote is a separate observation.
The company reported quarterly revenue of about fourteen-point-six billion dollars, up one hundred sixty-one percent. GAAP operating income was about two-point-eight billion. Net income was higher, at four-point-four billion, helped by non-operating income and a tax benefit. That distinction matters when judging the earnings. Connectivity grew strongly, while cloud agreements and the Cursor acquisition contributed to the expanded Super Intelligence business. The growth is not all organic.
Quarterly capital spending was nineteen-point-six billion dollars. Most of it went into Super Intelligence. The cash-flow statement covers nine months, so subtracting quarterly spending from that longer-period cash flow would give a misleading comparison. The useful question is whether these businesses can generate durable cash to support the investment. Revenue growth, accounting profit and cash generation each tell us something different.
Tesla: financial results still ahead
October 21 premarket observation: $378.02 (+1.15% versus the October 20 regular close of $373.71). Completed-session 20-day SMA: $369.71; 50-day SMA: $361.11; 200-day SMA: $387.26.
Tesla is the next earnings test. It was around three hundred seventy-eight dollars before the open, roughly one percent above Tuesday's close. That's near Tuesday's high, with the twenty-day around three hundred seventy and the fifty-day near three hundred sixty-one below. The two-hundred-day near three hundred eighty-seven remains overhead. Its financial results are due after today's close. The early rise comes ahead of the report; the financial results have not been released.
Calendar and confirmation
Today's checked official calendars do not show a major economic release before the open. Quarterly wage data and the petroleum report are still on the calendar later. For this preview, the focus is the earnings already reported and whether the regular session confirms these early moves.
The takeaway is an uneven recovery. SPY has a fifty-day reclaim to defend, QQQ still have important levels overhead, and Netflix and SpaceX are giving us opposite early reactions. Keep the completed daily charts separate from premarket observations, and let the next daily closes test the recovery cases.
Daily candles, averages and historical closing declines end October 20. October 21 premarket observations are separate recorded observations, not completed daily candles or continuously live prices. Returns exclude dividends. Spoken share-price levels are rounded naturally; chart labels retain two decimal places.
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And remember, this is market research only, not a recommendation to buy or sell.