Don't Let Them See You Cry

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My First ARKK Target Implodes

This was one of the first ARKK stocks I targeted with puts last year. See: What I Shorted Today. I did not ride this down today, but take pleasure in confirming my thesis again.

Sinking the ARK Part 2

See Part 1 here: Sinking the ARK Part 1

The last post covered the top-10 holding in ARK, this post will cover the 10 largest ownership positions. The thesis here is that iff orced to sell, the ARK funds will have an outsized impact on these stocks. The next level of research, which I don't plan posting on, is to go through the volume data and find the stocks that are less liquid. I published a list like this earlier in the year on ARKK alone.

The list below is heavy in bitoech companies. I generally avoid these because they can soar on good news.

First up is BLI. This is a relatively new company. I shorted this earlier this year because of high ARKK ownership and it being an IPO. Below $22.51 and it should slide.

Beam Therapeutics. A subject for another post is whether the not-vaccines, if proven to be killing people, will wreck genetic medicing for a generation. Unclear if something like that is in the works, or if we're seeing the "ARK effect " in biotech, or this is simply a potential topping pattern.

Vuzix.

Signify. Losing ground since its IPO. Where's support? Nobody knows.

I don't want unlimited upside risk in a stock like this, working on cancer drugs. That could be a topping pattern in the works though.

Personalis. Notice the pattern similar to TDOC, which I covered in the last post.

And TDOC again.

Of FATE, CGEN and PACB, the FATE and PACB looks most interesting to me, but like with some of the ones above, CGEN might have plenty more downside to come.

Finally, here's the ARK Genomics ETF, ARKG. Notice the simlarity to some of the above charts.

ARKK the Retail Roach Motel

Do or Die for the ARKK Shorts

The dreaded h-pattern is in place. Hell for bulls or bears will swiftly follow. ARKK itself is much earlier in the pattern, but underlying holdings that I shorted along with ARKK are closer to completion, with BLI closest to a breakdown. TREE is already broken down, but battling around around a suppurt area. If it doesn't hold here, firmer support is around $190.

What I Shorted Today

Bought some puts today. ARKK. The latter two I like as illiquid holdings within ARKK. TREE has a massive topping pattern to boot. It's going to collapse if it gets under $190, support likely in the $190 to $200 area. BLI is a recent IPO, also has cheap puts relative to how much the stock moved in the last down leg.

One that I like on the downside, but didn't short: SHOP. I think support is around $900 if it goes big.

Instead of SHOP, I have puts on Amazon instead because I like the risk reward better. The fuscia line is former resistance from 2000 high to 2018 high. Amazon is very close to losing it and I suspect the first potential resistance area is $2600 or lower.

To summarize: I suspect VIX bottomed. I suspect the macroenvironment for tech has turned. The Fed will not stop the rise in long-term rates lest it sink the market and economy. It will sacrifice tech for inflation. INDU is the boss now. I also believe bulls have heavily bought the dip. The stimulus has been front-run. BTC spiked and then pulled back, perhaps that's the top or at least a tradable one. Stocks such as MSTR are looking as if investors do not believe BTC will keep rising. I didn't trade the 2000 top, but remember the relentless fall in tech, and going back over the news from then, it feels similar with the "buy the dip" mentality in full force. My puts are for April. I'm looking for a big initial break. I do not believe the Dow has topped, although the whole market will suffer if tech gets whacked like I expect.