11/2 Recap

We got a huge rally today led by a lot of small caps in a short squeeze apocalypse. ARKK is up 8% as I type this, that is an absurd move for an ETF, especially one of that caliber. PLTR,SHOP,and ROKU were all up 20-30% on their earnings. Even PayPal which was arguably the worst stock of the last year is up 6%. Yields are in retreat and the growth names finally had their day. We always do this where small caps just goes down for weeks/months on end then they all pop 20% on nothing, it is a bit ridiculous and most of these are still not great investments in a high rate environment but for today, they were great trades.

The SPY had a big followthrough after yesterday’s close over the 8 ema but today we have Apple reporting after-hours and the biggest component in our markets will definitely be a market moving event. We have a clear path to about 440 now if things go well.

ARKK, below, is breaking a pretty large downtrend, fundamentally I’m not a big fan of these but the chart is the chart and it’s saying that it is time to buy small caps. Things don’t have to make sense, but look around today every small cap name is ripping, even absolute junk like LMND and SDGR are up 20%, it’s a massive squeeze, silly but that’s how markets work, you have to just keep an open mind to possibilities beyond what you think and the falling rates just poured gasoline on these small caps.

The TNX finally looks like it may be breaking down by pulling pack 8% off recent highs in a few sessions. It’s only natural as yields fall for equities to have a powerful move like we’ve seen. This is probably the most important thing to watch now if you’re long small caps or other growth names, you want this to keep falling.

Trends