A fatal combination for the markets in the short term: hyperinflation and now the war in Ukraine. We will see in the coming days how it will evolve both from the side of Western repercussions and how central banks intend to behave. For now, Powell has confirmed that he wants to go straight down the path outlined: fighting hyperinflation. Perhaps there will be a combined single hike in March, but it does not rule out double hikes in subsequent meetings.
The ARK Innovation ETF, after strong performance in 2020, started an equally strong underperformance compared to the sector benchmarks. The picture of weakness seems to persist and the ETF also pierced the Fibonacci retracement of 61.8% of the entire bullish trend which started in March 2020 and which reached the top on February 16, 2021. Recall that the break of 61.8% makes reversal of the main (bullish) trend more likely. It therefore becomes an ETF you can go short on. We have already closed several SHORT gains. We have again taken the target at $55. We can continue towards $50.
We recommend going SHORT on the ETF only at the break at the end of the $60/$57.4 range by buying the Leverage Shares Short -3X ARK Innovation ETF (ISIN: XS2399368906), with an increase in returns towards $60, with a short-term target of $50. Alert/stop loss should be above $60.