Before the Bell Nov 19

Tickers:  SPY QQQ IWM FB AAPL TSLA  AAPL AMZN NFLX GOOGL SMH ARKF ARKG ARKK ARKW

Before the Bell  is premarket prep for active traders. The note provides detailed stock market technical analysis focused on the indexes and FAAMGs. Key levels and trading locations are provided, along with trading plans and timely commentary to keep you on the right side of the trade.

Earnings 

Companion Video  

The video is a detailed technical review of the indexes and FATMAAN names. All the key trading levels are identified along with commentary and trade plans for each ticker. Trade ideas are also discussed.  Run the video at 1.25x to reduce run time.

Find the video HERE

Macro Data Releases Week of November 15

  • Monday – Biden-Xi Virtual Summit; Empire MFG; Biden expected to sign Infrastructure Bill
  • Tuesday – Retail Sales; Import/Export Prices; Industrial Production; Business Inventories; Housing Index; 3 FOMC speakers; RIVN options set to open
  • Wednesday – Housing Starts; Oil inventories; 20 yr Bond Auction; 5 FOMC speakers
  • Thursday – Jobless Claims; Philly Fed; NatGas Inventory; Leading Economic Indicators; KC Fed; 4 FOMC speakers
  • Friday – Rig Count

ARK Complex begins to Crack

Despite the major averages being at/ near all-time highs and having been in a bull market all year, the ARK complex has largely not participated. Now as the charts below show, price in a variety of the ARK funds are rolling over. ARKG looks especially bad as it begins to break down on the weekly chart.  If you have a robust long book in your holdings, I like getting short and ARK fund or 2 as a hedge or to pre-position for a market downturn.  I think the risk of a big upside move is limited so from that stand point I think these names make good candidates for short ideas.

From a more fundamental standpoint, we all know that the investing strategy of these funds is to take positions in small, innovative companies with large upside if their disruptive strategy takes hold. THe problem is most of these companies are losing money. THat is what I believe is the Achilles heal.  Negative P/E’s can and have worked in a liquidity driven market but as that liquidity begins to be withdrawn, I think traders / investors will gravitate to the tried and true that have strong earnings support.

Given the posture of price in the charts below, I think that ARKG has the most immediate opportunity for a downside move. 

ARKF – Fintech

Fintech names, specifically in the payments space have been weak. You can see that big picture, ARKF has done nothing in 2021 despite a strong bull market. Now price sits on the 200ema. A break below opens the door for a move to $48 and potentially $45 if things fall apart.

ARKG – ARK Genomics on the Edge

ARK Genomics, which is focused at the small cap end of the biotech space, peaked out in Jan /Feb 2021 and has been sliding ever since. As you can see, price is at a critical spot. Much below $70 and think this thing fails very quickly.  Why?  Look at the massive void below price on the Weekly chart.   It’s a long way down with very little technical support. Set yourself an alarm somewhere around $70 and be ready to go on the short side. Being a weekly chart, if things begin to roll down hill is the type of trade you can be in for months.

ARKK – Innovation Fund

Price was rejected at the prior high and is now below all the moving averages. A break below $114 opens the door to test the prior low at $107.50, the $100 if things fall apart. TSLA is a major holding in this fund. Any outsized move, either up or down, will impact the travel of price in ARKK.

ARKW – Web 2.0

Price was again rejected at the $160 level and has now broken back below the upper end of the prior trading range. From a technical standpoint this is a bearish event with the price target being the far side of the trading raange…in this case $137.50.  You can see that in prior instances of this, price indeed did find the low side of the box. On any short position, your stop would be just above $155.

INDEX CHARTS

A detailed walk-through of the levels and trading strategy for the indexes is given in the video ( link above) . The static charts are provided for reference. The FATMAAN names are also reviewed in the video along with trade ideas and other charts of interest.

SPY 2 hour

SPY 30 min

QQQ 2 Hour

QQQ 30 Min

IWM 2 hour

IWM 30 min

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