Earnings This Week

Nasdaq, semiconductors and some energy producers.

Today's Losers

More familiar names. These all fell at least 3 percent on high volume. I shrank the list with daily volume and market capitalization limits. A ABNB ACIW ADSK AER AMCR ANSS APTV ATI AVNT BALL BILL BL BLCO BR BRKR CBRE CDAY CE CF CFLT CGNX CHRW CLX CROX CRWD CTLT CWH CWK DDOG DLO DNB DOCN DT DV DVN ECL EL ELF ENTG ESI ET ETSY EW EWBC EYE FIVN FND FROG FRSH FTNT GDDY GH GLBE GOLD GPN GSAT GT HL HOOD HRB HUBS IDXX IOT JOBY JXN KSS LEA LNC LNTH LTHM LUMN MKSI NCNO NEM NLOK OI PARA QCOM ROK ROKU RPD RUM SOFI SSNC TEAM TEL TNDM TPX TRMB TWLO TXG VEEV VRSK XRAY Z ZBH ZI ZIM ZS

Capitulation Begins?

The major indexes rebounded from intraday lows and the Dow even went green. Meanwhile, the usual suspects imploded again. Of these, only SNAP went lower (being the cause of it all with weaker guidance), setting up a potential falied h-pattern on many of these charts.

Here are ARKK and ROKU, the former is much earlier into an h- so not sending a breakdown signal, whereas ROKU could break lower tomorrow if markets slide. Or that's a dobule bottom.

And BTC still sitting right on the line.

Bye BTC

It is go time for xTrends' ROKU-BTC analog.

Here Come the Bears

xTrends' ROKU-BTC analog is screaming BTC downside here.

ROKU BTC Still On Target, Amazon Still Small Caps

BTC-ROKU Analog

I noticed both bounces before the final plunge occured around the 61.8 percent retracement. For the analog to hold, BTC has to stay below the horizontal and break lower.

BTC to $25,000 Next Month

The BTC-ROKU analog discovered by xTrends says to expect this possibility.

Right About Now

Analogs can be tricky, but there's a window open here...

BTC ROKU Analog Says Crypto Rally Done

Don't Let Them See You Cry

Content made on Kapwing

Roku and Bitcoin

xTrends noticed this one. ROKU is ahead by about 3 to 4 months:

The trouble with analogs is they can suddenly break down. This one looks stronger because it has held up for more than a year, it is a similar topping pattern and most importantly, both are speculative bubbles. Bubble analogs fall apart after the main decline is finished. BTC hasn't had its big decline yet though. If this pattern holds, we'll be talking about BTC $10,000 by June or July. If it holds tightly in the coming days, the chart says this battle around $40,000 will be the last for some time. Downside acceleration coming by mid-March with the $20,000 area coming sometime in April or May.

Crude Oil Closes in on $91 $93 Per Barrel as Federal Reserve Abandons Taper Plan

Market Manipulation Goes Viral

Note: The headline is hyperbolic. I don't know if the Fed has unofficially abandoned their taper plan. All I know is they aren't tapering.

The Federal Reserve's balance sheet data is published weekly. It is available at the Federal Reserve website (it is in section 5) and at FRED. The Federal Reserve should have bought around $45 billion in treasuries and MBS the past month. Instead, it purchased $116 billion. At the peak, it was buying $120 billion. It bought less in December, but had to sell (or roll off) $33 billion to get down from a ridiculous $140 billion monthly increase in December. Crude oil is closing in on $91 per barrel and there isn't much resistance up here except for the psychological level of $100 per barrel. The Federal Reserve claims to fight inflation, it claims to be tightening, but there is absolutely no tightening as the economy and middle/lower class families suffer under high inflation. It won't be long until the bond market starts suffering too, and that's when mortgages will become more expensive and economic activity will quickly swing into a recession.

We have a crooked, corrupt, sycophantish media staffed by journalists whose understanding of economics only slightly exceeds that of a cave dweller who recently emerged from the primordial morass. The politicians in Washington are corrupt criminals probably selling hand over fist along with the Wall Street banks propping up this sham market. Why is it that almost every moment the Nasdaq is ready to break lower, miraculous dip buyers arrive in force to push the market higher? By itself you could argue it's the Pavlovian dip-buyers who have been trained by the Federal Reserve for the past 12 years, but then riddle me this: why are a litany of second-tier growth stocks like ROKU, TWLO, W and so forth, exemplified by the ARK Investment ETF (ARKK), getting blasted by near double-digits the past two days? Who is furiously dumping technology stocks while the major stocks and the indexes, via futures trading, are propped up so as to keep the bottom from dropping out on the market? All while the Federal Reserve is jamming crude oil higher with it's non-taper?

As a trader, their efforts allow me to get more and cheaper put options by dragging out the process. The Federal Reserve's actions will cause greater stock market damage when they suddenly stop buying assets in March or April. Or if they don't stop, they'll unleash inflation that will sink stocks by at least 50-percent before adjusting for that inflation. The more damage they do, the more the assets I've purchased will outperform. I expect some level of disaster because they've already made such a mess.

Yet I wonder, why are they continuing these policies in direct contradiction of their policy statement, reducing the Fed's credibility to zero? They can do the same thing with interest rates by the way. They set the rate when they transact with banks. They could say "we're raising rates 5 percent" and continue giving banks zero-percent loans. There's nothing stopping them from doing that, particularly when they said "we'll reduce asset purchases by $15 billion per month" and they're not doing it, and nobody calls them on it.

There are no pleasant answers. The "good" explanations are some variation of "they have to do it to save the market," but that also argues for dumping all your financial holdings now, before something nasty comes crawling out of the woodwork. The "bad" explanations are worse because it leads to a total loss of faith in the central bank.

If you've been reading here awhile, you know I've been looking for a drop in crude oil tied to the taper. Except there's no taper. So now we're at the point where the charts I follow are screaming breakout. And to get a breakout in something like offshore oil drilling takes much higher oil prices. To get a surge in fertilizer stocks takes much higher natural gas prices, and it will be followed by much higher food prices. Yes, many people have been predicting those moves and yes, the fundamentals argue for it over the longer-term. Which again raises the question: why is the Federal Reserve risking an explosion in these prices by undermining its own credibility? What made them turn their policy statements into toilet paper? It isn't the stock market, too small. The problem we are looking for is probably in the bond market.

Facebook Misses Earnings, Destroys NQ Breakout

I'm genuinely shocked. Netflix was destroyed by its growth estimate. Facebook missed wide on earnings, though they beat on revenues.

Facebook dropped a nuke on the NQ too, as did SPOT and QCOM who also must have delivered poor reports. SPOT is the #8 holding in ARKK. That latter stock was pummeled today as old favorites like ROKU, TWLO and CGEN tanked.

In 24 hours we've gone from bull euphoria and to bull pain again. Amazon will report tomorrow after the bell. A strong report could salvage the bull rally, while a bad one could be the fuel that takes out the lows. I went short Amazon today via XLY.

Update: Here's how I see the Facebook trendlines now. Major support coming up.

Stock Screen Results: Biotech is Doomed

I went looking for stocks with new 52-week lows and some volume indicators. Ended up with a list of 10 stocks when I searched for double normal volume. These seven looked like the most interesting of the bunch. Biotech pops up several times and looks extremely ugly.

Bear Trap or Next Leg Down Incoming?

Biotech was green earlier today and then reversed.

Biotech was a decent short at the horizontal yesterday, but who knows how it will finish the year. More interesting are some of ARK's holdings that haven't gotten off the mat. I already posted SQ earlier today, that is one. TWLO and SE are two more. roKU and U don't look particularly strong either. The question is bear trap or weakness? Given I think the rally will run out of steam, I lean bearish.

This one isn't in Cathy's portfolio, but looks ready to go.

Price is Too High

Out of ROKU puts expiring this week, into MSCI and IDXX for January.

Wayfair Plunges Tomorrow

I think Tesla could get to $900 too, if Biden has hinted at a higher-than-expected CPI number.

Reuters: Biden says inflation data due Friday will not reflect recent drop in some prices

President Joe Biden sought to reassure Americans on Thursday that rises in consumer prices were easing somewhat, saying that inflation data for November due out on Friday would not reflect a recent drop in some prices including energy costs.

Maker forecast is 0.7 percent. I don't know if it is worse or not. That would raise the 12-month, but it'll take 0.9 percent to get a 7-handle.

Wayfair and Tesla are at support. The Russell 2000 futures crosses below the 1-year moving average again. IWM hasn't yet. If CPI comes in high tomorrow, I'm expecting a big down day for tech and related growth/momentum.

BTC looking ugly too.

This could be a bear trap. Maybe it's a dip and stocsk rip higher tomorrow or next week. I just want that caveat there to anyone taking on risk. I take on risks I can live with. I can reverse position at any time and do. But right now, I am betting the correction resumes tomorrow. XLY, TWLO, AAPL, UUP (calls) are my 4 largest positions. I have weekly options expiring tomorrow on ROKU, W, and XLE because I do think tomorrow could have some fireworks.

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.