ARKK possibly worth a swing for relief rally

2022年2月23日

Just tossing this one out there:

Cathie Wood's ARKK Innovation ETF is within 1% of completing a round-trip to its pre-pandemic highs. It's also at the bottom of a fairly major parallel channel that it's been forming since February last year. In purely technical terms, it looks poised for a bounce.

This is not a long-term hold, especially with Tesla as the top holding. Valuations remain high, and Tesla is being investigated by the SEC. I also wouldn't use call options to play this. The options premiums are super expensive. I'm just thinking buy a few shares for a technical bounce, and maybe sell at the 20-day EMA.

Counterintuitively, the Russia-Ukraine crisis is a possible catalyst for a bounce. Forecasters seem to think that conflict in Ukraine will make the Fed more dovish this year, with fewer rate hikes than previously expected. ARKK has been super sensitive to interest rate expectations, so it might be bullish for the ETF if rate expectations ease a bit.

One nice thing about this trade: since we're so close to channel bottom, you can put a stop loss right beneath the channel.

2022年2月25日

交易手动结束

There were 3 reasons for this big rally in US stocks:

1) The market was relieved there'd be no WWIII.
2) Rate hike expectations eased.
3) The Euro plummeted against the US dollar.

However, with EURUSD recovering, inflation data bad, and 10y flat, the US stock rally may falter here. I sold about 30% of my positions today, including my ARKK swing. (The bull case is that consumer spending data was stronger than expected today; but that helps retail stocks, not ARKK.)

2022年2月28日

注释

The market is backing off rate expectations in a big way this morning, with bonds finally moving decisively higher. That makes tech, especially high-beta tech like ARKK and XBI, probably a solid long today.