Will ARKK Outperform the Market?
The small-cap trade is on— so long as $ARK Innovation ETF(ARKK)$ keeps above 45, and $iShares Russell 2000 ETF(IWM)$ above 212 I favour the melt-up narrative with outperformance in this category.
Ending last week I am long ARKK. The $S&P 500(.SPX)$ is up almost 18% year to date and the Nasdaq 20%. In a melt up scenario ARKK trading 70-100 does not feel unreasonable.
If a melt up does transpire— greed will blind participants as it always does. My plan is to enjoy the melt up trade through small cap participation, and conclude the trade when the short term trend, breadth and momentum (my “three correction criteria”) falter in the broader market.
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