The bulls made it through Monday with a win, but it sure wasn't compelling. While the Nasdaq generals -- Apple (AAPL) , Microsoft (MSFT) , Alphabet (GOOGL) and Amazon (AMZN) -- all closed in the black, the Invesco QQQ Trust (QQQ) was led higher by companies such as Costco (COST) , Dollar Tree (DLTR) , Kraft Heinz (KHC) and Moderna (MRNA) . I'm not trying to knock Moderna or Costco, but let's face it, for the sake of more reliable momentum, I'd rather companies such as Apple and Alphabet lead the index higher.
On the bond side of things, the iShares 20+ Year Treasury Bond Fund (TLT) , which I wrote about on Monday, continues to trade terribly. That said, barring something truly unexpected from the Federal Reserve, I don't expect TLT to put in a V-shaped recovery. Indeed, any recovery in bonds likely will take time and patience. And if (or when) the TLT continues toward $90, I'll probably be a buyer. But any sharp bounce in bonds likely will send equities, which already are trading better, higher in a hurry.
Away from bonds, a few traders (and readers) asked about the ARK Innovation ETF (ARKK) , whether I was still actively trading it, and how I approached the price collapse in Chinese stocks.
Beginning with ARKK, I haven't been trading it lately because it has traded terribly for what feels like an eternity. While the Nasdaq is up more than 4% for October, ARKK is down more than 6%. Adding insult to injury is that ARKK stocks that held up through the summer and into the early fall, such as Beam Therapeutics (BEAM) , Intellia Therapeutics (NTLA) and CRISPR Therapeutics (CRSP) , are now getting sold. The bottom line is I'm willing to trade anything with sufficient volume, liquidity, volatility and a decent trend, but ARKK trades like it wants to lead equities lower. Until ARKK sets up bullishly above its 21-day exponential moving average (EMA), it will remain on the "do not touch" list.
Turning to Chinese stocks, the most straightforward advice I can offer is this: Don't own stocks tied to a communist country. I've traded stocks such as Alibaba Group Holding (BABA) , Baidu (BIDU) and JD.com (JD) in the past, but with thousands of other stocks and countless ETFs to pick from, why roll the dice on companies at the mercy of President Xi? The juice ain't worth the squeeze.