“Liberation Day” losses?
Gone.
The S&P 500 has now erased all its losses from “Trump’s Liberation Day.”
Headlines sparked panic. But prices held their structural trends.
When narratives overheat, markets often do the opposite.
This is what trend resilience looks like.
Are You Paying Attention?
President Donald Trump’s “Liberation Day” didn’t break the primary trend.
It only tested it.
Shorts getting squeezed is the real liberation.
You want to talk about Make Small-Caps Great Again?
Short interest in the Russell 2000 Small-Cap Index is hitting new 52-week highs.
Do you know which types of stocks dominate the Russell 2000 Small-Cap Index?
Biotechs and regional banks.
So they’re short the small-cap indexes, and even more short their biggest components.
They’re also shorting the ARK Innovation ETF (ARKK), Kathy Wood’s flagship fund. In fact, it’s the highest short interest in ARKK ever!
This ETF family of funds is loaded up with speculative growth stocks that earned her the distinct honor of losing the most amount of money of any ETF family ever.
And to be clear, I don’t bring up Morningstar calling her “The Wealth Destroyer” to disparage her or her company.
I only mention it to reiterate that the historic short interest in ARKK has come after the wealth destruction, and not before.
Are you paying attention?
They weren’t shorting them before…
They’re shorting them now – after the fact.
They’re short the biotech stocks at the highest rate in several years.
So guess what we’re doing?
We bought a small-cap biotech this week, the definition of “speculative growth.”
And we bought the options too! That’s how aggressively we’re doing the opposite of the crowd.
We’re buying what they’re selling, and you’re seeing it in real time.
This Week in Everybody’s Wrong
On Monday, we reviewed four magazine covers The Economist published in April alone.
There’s a lot of pessimism out there. And we love it.
Here’s why stock prices are likely headed much higher from here.
On Tuesday, I shared one of my favorite old-school stock market indexes. Nobody cares about it.
But there’s a lot of value in the modern version of a 140-year-old theory.
Here’s why we still track the Dow Jones Composite Average.
On Wednesday, we talked about Michael Saylor’s Strategy (MSTR) and his most recent Bitcoin (BTC) purchase.
This dude is not going to stop, and why should he…
Here’s why Saylor’s Bitcoin treasury company is my kind of Ponzi scheme.
On Thursday, a fresh set of monthly candlesticks showed multiple U.S. indexes turning former resistance at their prior-cycle highs into fresh support.
We love to see it.
Here’s why I still refuse to fight Papa Dow.
On Friday, I showed you how Uber Technologies (UBER) is setting up nicely.
Polarity is in play for this standout in the world’s oldest stock market index.
Here’s why we’re paying attention to Papa Dow’s new ride.
Have a great weekend.
I’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs