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.