Cryptop

Crypto Stocks Look Ready to Sink

The downside is open if they want to go.

Crypto Complex Breakdowns

I saw that the average stock in the market is down 38 percent from their high. Well, take a stock like SI. it is down 56 percent as of today. It still has an 80 percent drop ahead of it because the entire bubble will be reversed. The even better good news for bears is that the major indexes are still relatively high and VIX is still low.

Nuke the NextGen Economy

A "NextGen" economy ETF. double top in place and it failed at resistance.

Notable: this isn't only a bunch of aggressive tech stocks. There are a bunch of those holdings, Coinbase is tops at 2.23 percent of assets, but here's as many holdings as I can fit with a screen shot. Lots of "blue chips" too:

Generally, I don't likefunds with lots of filler stocks. I remember a nanotech ETF from PowerShares (now Invesco funds) that had a bunch of stocks like IBM and GE in the top holdings. I want pure plays if possible. In this case, not being a pure-play is a plus for BLCN because it'll probably hold up better in a bear market. However, what's interesting about the portfolio is how it might be a better representation of investor exposure in tech. There's a double-top in place with a target of $36, below the blue trendline. If BLCN is going down clsoe to 20 percent, the weaker stocks in the portfolio will be dropping 30 to 40 percent.

Bearish BTC Puts

These two remain my favorite targets for bearish crypto.

These ones will trade in the same direction as the above two:

BTC\

SBNY Has a Crypto Boost

Usually I check companies out when I see a chart, but I figured SBNY was a plain vanilla bank. I didn't realize Signature Bank was into cryptocurrency. The run up in the stock doesn't look as crazy now, but I also think the downside is far larger than I had thought. Coinbase has a similar price, but it's options are almost twice as expensive. I think a big drop in the market will lift SBNY's volatility to that of Coinbase's.

Square actually has the cheapest options in my view. I'm looking at expected move, cost of the option and the return if I'm right. I don't have puts on Square yet, but it's going on my 5hit list.

Crypto collapse should be coming down the road at some point. I don't see it as an imminent threat, not even a correction is likely, until BTC breaks support.

It will probably also take a BTC breakdown to signal a real bearish move across all specualtive financial assets. Until then, this is only a correction that could reverse at any time.

Sinking the ARK Part 1

Preface to this post: As I say about Tesla, I have no ill will towards Cathy Wood or ARK. I think all will be "victims" of their own marketing success. Like moths to a flame, speculators with a penchant for investing with reckless abandon have flocked to their stocks. They have become the tip of the speculative spear and when that spear breaks, things will get ugly. I might be a buyer of many ARK holdings at the bottom of the next bear market though. What I'm looking at is a market gone insane on speculative excess. The example I always go back to is Amazon: it fell 95 percent in the dotcom bust. Look where it is today. Expecting a massive drop in stock prices is a macro theme. However, by looking at individual charts, I'm hoping to detect the stocks that will perform worst in a bear market. And of course, this all requires an honest-to-God bear market taking place.

There are a lot of great bearish setups in the ARK funds. I'm only going to go through one of two top-10 lists in this and the next post. The first in this post is the 10 largest holdings. These are the stocks most important for headline performance in these funds. The next top-10 in part two shows the largest ownership positions, i.e. stocks that would be candidates for plunges if outflows become serious. I'm not choosing these for being the best bearish setups. You can find all the data I'm using for this post here: All 156 Combined Ark Invest ETF Holdings. If you find a great setup drop it in the comments.

Here are the top-10 stocks across all of the ARK Funds.

I posted on Tesla yesterday.

Teledoc looks like one of the best bearish setups.

Coinbase doesn't have enough history for a great read, but I'd be comfortable shorting it here. I'm not because the options are too pricey, but since it's right around the horizontal I've drawn, I'd get out of the trade fast if wrong.

I had success shorting Unity earlier this year. The chart is not bearish now, but that spike up might reverse if "the ship starts going down" and Cathy has to sell to meet outflows.

Posted this one yesterday too. Didn't get filled on my order as it dropped away quickly. Looks like it will drop into its range at least.

Bombs away, maybe? I like IPOs for this exercise because institutional support is lower than in established companies.

Square might test the $190 level. Below and bombs away.

Roku and Zoom look like bleeders. Their charts are already ugly, lots of losses already, not a great place to take a position and yet I don't see them finding support soon.

Finally, Twilio. I opened a put position on Friday.