Trading ARKK After Growth's Big Bounce

The S&P 500 is less than 4% from all-time highs.

Technical Edge — 

• NYSE Breadth: 79.8% Upside Volume

• NASDAQ Breadth: 83.2% Upside Volume (!)

The ES is now up more than 12% in 11 sessions, while the Nasdaq is up more than 16.5% from the March low. 

Something else extraordinary? The S&P 500 is less than 4% away from its all-time high.

All I can think about is how much we talked about a “sell the rumor” lead-up into the Fed event and a “buy the news” reaction to its hawkish stance. 

The reason why is simple: It’s not what investors would have thought would happen — buying in the face of a bunch of rate hikes. The market has a funny way of doing that. 

Game Plan

The question now is, how far can the market continue to go? 

I’ll come out and say it — this rally has gone further than I thought it would go. But just like we talked about it in this week’s video, at some point it needs to dip, even if it’s just a mild correction into some short-term support. 

This would be the healthiest outcome for bulls. 

ARKK

Daily

Let’s start with a look at ARKK first. High-growth stocks have been a huge underperformer. And I mean huge. Everyone loves to rag on Cathie Wood & Co. 

Personally, I could care less about the narrative, but the reality is that the return of growth stocks would be another feather in the cap for the bulls. It would signal “risk-on” — just like when we see small caps perform well. 

As you can see on the daily chart above,