JC Parets is a weekly guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

Speaking on Benzinga's #PreMarket Prep, Eagle Bay Capital Founder JC Parets said that Netflix, Inc. (NASDAQ: NFLX)'s announced stock split is "a negative for the market." Parets agrees with most analysts that the split "adds zero value," except to allow smaller investors to buy more shares.

More critically, Parets said that he is watching Apple Inc. (NASDAQ: AAPL) to see if it breaks out of its recent range to the upside or downside. If forced to choose a direction, Parets said that it is taking too long for Apple to break higher and the longer the time, the lower the likelihood of an upside break. If it fails, Parets said, "it's really bad."

Related Link: Why Citi Downgraded Netflix, Despite Liking The Stock?

Further, Parets is looking at an Apple ratio with the S&P 500 – for example by using the SPDR S&P 500 ETF Trust (NYSE: SPY). Parets argued that if you get an upside break in that ratio, it should lead the market higher as well. However, if the ratio breaks down, the market could go lower.

"Rather than looking to trade Apple," Parets is monitoring that correlation to see how it "resolves."

Parets dismissed the claim that stock splits can lead prices to consolidate for longer than normal – given the larger float of shares. He said, "I've never seen any data to suggest that. For me it doesn't make any sense at all."

Again, Parets reiterated that splits larger than 3-to-1 could be viewed as a negative for the overall market.

Year-to-date, Netflix has handily outperformed the overall market, gaining 91 percent versus a 2.25 percent increase in the S&P 500. Apple has gained nearly 16 percent to become the largest company in the world, by market capitalization.