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STOCKS – NFLX, DIS, SHOP
MACRO – QQQ, ARKK
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The market fell today, with most of the damage contained to the NASDAQ. The QQQ ETF dropped by more than 1.4% following Netflix’s move lower, resulting in a good portion of yesterday’s rally being erased. The remaining balance of the gains is likely to vanish in the coming days as the Qs head back to $336.
ARKK ETF (ARKK)
It was much worse than that for many stocks in the market, with other stocks in that former stay-at-home trade collapsing. The ARKK ETF fell nearly 6% on the day, which erased all of the 4% gains from yesterday and more. The trend remains lower.
I think a lot of this was due to the weakness in Netflix, as investors are probably worried that other companies are now going to face a similar type of mass exodus. That is entirely possible; we won’t know until we see some of these results. But when there is uncertainty, investors sell, and they don’t have the patience to wait.
Shopify fell 13.3% today and was pounded even harder after it became known that the company was looking to make an acquisition for Deliverr in a $2b deal. Perhaps this was a short-gamma squeeze at play, with the put volume surging and implied volatility and skew rising. The market doesn’t seem to like the idea that Shopify is going down the Amazon route. The other problem is that the stock isn’t cheap yet. It is getting there but still needs to see some further downside; I think $440 is the next price to watch for here.
Netflix fell right into the January 2018 gap today at $226, and that is where it stayed. It probably does a lot of nothing for a very long time now, with a downside risk to $200.
Disney fell today, as expected. It gapped below support at $127 and now seems to be well on its way to $117, as it fell in sympathy with Netflix.
That’s about it.
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