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Saturday, January 30, 2021

Weekend Charts and Stuff

Update:

NYSE Daily. We have had only one 80% up volume day on the NYSE in 2021 that was on the 6th of January which took prices upwards. The close on Friday was back below that candle.

Update:

ROBINHOOD UPDATE 

Again, great info here from ZH. A lot of Robinhooders may indeed be the ultimate bagholders because they may be trapped in their own trading platforms. Their only mistake? Trusting a relatively new app that promoted free trading and putting lots of money in it not knowing that it all may blow up and take their money with them. Hopefully not.

Update:

SILVER 

I really haven't posted any opinion on Gold or Silver since I followed them to their September peaks and they both pulled back. Gold made a new all-time high, yet silver was far below it's high.

But again, another article from Zero Hedge on a potential Silver spike made me look again. Its been a while but now is the time to take another look at silver.

At the very least, a good interpretation is that Silver is in an A-B-C situation and they have yet to get a wave C to break above A.  The weekly shows where it has held above major support at about $20.50 range.

And the daily shows a second support range higher that has had 3 mini "tests" and has bounced up on some volume.  It seems it may be poised to finally move higher if this is indeed wave C.

Physical is trading almost in lowish to mid-$30's, so $30 minimum seems a good starting point for a C wave target. If we have wave [i] of C already formed, then wave [iii] should push things higher in rapid fashion.
Oh I forgot its a classic "cup and handle" pattern potentially as shown the example from Chart School on Stockcharts

Update:

I linked this article below but its the best explanation of the clearinghouse plumbing explained in simple terms that I have read so far.  So yes, Robinhood does/did have a liquidity problem, because the RH clients are taking one-sided bets mostly in margin accounts. I didn't realize most accounts on RH were margin accounts and that seems like a purposeful fraud. (Remember the suicide over the past summer as a result of not understanding margin or specifically how it clears?) I did not know that margin accounts actually didn't "own" their purchases the same way as a regular account (I closed my margin account years ago and have a regular TD account).

So apparently RH steers you to a margin account on signup. Did not know this!  (like I said never used the app).  This explains why they are having the most exposure to potential liquidity/counterparty problems. It also explains why they didn't have a bigger buffer since steering clients to margin accounts means less liquidity requirements (normally) for RH.  Apparently, $1B is not enough clearing/counterparty buffer in the current market in which RH is experiencing the greatest distortions.  Interactive Brokers mentioned they have $5B in liquidity buffer and said that's enough for them (for now). So perhaps RH actually may need somewhere between $1B and $5B of liquidity to handle their current situation (that they themselves got into) they are in? Or much more if things really get goosed?

That would mean come Monday/Tuesday, they are likely to be more problems with RH. And more forced liquidations of client's stocks without consent (because they can!).

Also in that thread from ZH in that it has now become Hedge Fund vs. Hedge Fund. Yet you can include WallStreetBets and consider them the largest "hive" (as Zero Hedge described) hedge fund perhaps on the planet. Now that there are 7 million members even if each only had $2000, well 7M x 2000 is $14B. 

So to dismiss WSB at this point as "just retail" is silly as combined they have real buying power of a hedge fund and apparently Robinhood let 'em all have margin accounts to boot!

So the "narrative" is still correct in its the "little guy" (Wall Street Bets - and multiple as-of-yet undisclosed Wall Street hedge funds) vs. Wall Street Hedge Monsters.  Pass the popcorn!

And since a (majority?) of WSB use/used RH, they are trapped in a shitty situation. And if most are actual margin accounts, RH can do as they please with ANY of it.

Its going to get ugly. The "narrative" is that there is real systemic risk (hey that's the system the elites themselves setup yes?) to the overall marketplace. 

But its a freaking lie....or the Emperor has no clothes.

You mean to tell me your shitty overleveraged fraud of a market is so delicate it can't handle a few short squeezes without suffering a major heart attack?

It seems that's exactly what your saying. 

SHORTMANIA SQUEEZE EDITION

I've been making a lot of fun of "Robinhooders" over the past 8 months or so figuring they are the ones that will hold the bag when the market finally turns. I think I was wrong on that.  I don't think I ever mentioned WallStreetBets, but yes, I suppose looking back you could say I somewhat equated the two. 

I never liked the Robinhood app (not as much as I don't like electric cars!). Never downloaded it. Never would trust it.  The "trust" part was probably well-founded as you have seen that they have screwed over their clients at the first sign of volatility. They also had problems in the March 2020 collapse.  I use TD Ameritrade and yes, I could buy AMC, GME and a few others no problems this past week. The issue is with Robinhood. 

But I was wrong about Robinhooders. They started a short squeeze frenzy (and no doubt there is also quietly big money coming in to take advantage) and I think this story will blow up huge this week much more so than last. If you haven't heard about it by now, you will by the end of next week. I have been checking all the usual places both "left and "right" and they all have their story angles on this issue.  I have been paying attention for the last several weeks about the short squeeze situation and had read last Friday's Zero Hedge post on it. When this past Monday's price action proved the phenomena was taking off, I knew it had legs.

What is surprising is that we may indeed have a market collapse (or not? I have a count either way) while the short squeeze in select stocks continues. Under pressure to sell longs (such as Apple, etc), the hedge funds seem to be the ones that might end up holding the bag at the top.

Many outlets are taking the angle of "it will all end badly for the little guy as it always does".  And it just may, but that sentiment is just another example of how everything that happens in the past is forever extrapolated into the future. At some point paradigms change, and one has to be open to see it. I think we are at one of those junctures in a lot of ways. Wall Street's own hubris and arrogance has brought it on themselves. Their construction of the system using extreme leverage to their own benefit will also result in their destruction.

So I sort of take the opposite stance now seeing just how ridiculously large some of these floats are shorted. I think retail will actually win the price war. However....

Yet I also assume the SEC will step in at some point if things get bad and screw retail over hard and force them to liquidate positions. How? By ruining sacrificing Robinhood (and Etrade if they have to). They'll stop the trading in the volatile stocks just to save Wall Street. I assume the White House and Pelosi and others will be the ones directing this. All in the name of "market stability". This will be no different than the election in my eyes. At some point an "official" narrative will form and well, that's that.

If Robinhood gets their own version of squeezed (and it seems they are), their entire brokerage could come to a screaming halt. Indeed it may well have a very outsized reaction on the markets. But we really don't know what will happen.  All I know is, I don't think it's over by a long shot.

One other thing, all these analysts saying GME is not worth anything? Well, last I checked they are worth $22B.  Who is to say if they hit $1000 they won't issue equity and be flush with tens of billions in cash to do whatever they please? Maybe even buyout another corporation or 2? What then, won't their "worth" be adjusted accordingly?

ORIGINAL POST

Posting some weekend charts. I'll keep the ranting to a minimum. I'll just keep tacking things on at the top as the weekend goes along.

MACERICH  CO. (Real Estate Investment Trust - REIT - MALL OPERATOR) SYM:$MAC - NYSE

This is one of the heavily shorted stocks I showed last week on both Tuesday and Wednesday (along with GME of course). This one has been a bit off the radar though which is why I picked it. Also because Gamestop stores physically resides in MAC malls in a sense. If you want to save Gamestop, you need to save the mall properties that house such enterprises. And they are worth saving. 

This ticker hasn't shown up on anyone's restricted list just yet.  But it made the news Friday on an explanation of why it sold a bit harder than the other shorted stocks this week. An Ontario Pension Fund dumped all 24.5 million of its shares at an average of about $20.00. That's a big dump of course.  All the major financial pubs carried the story

I wonder if they pulled the trigger much too soon? Is an Ontario Pension Fund considered "smart money"? Not usually. So as a contrarian indicator, I'm assuming this stock has further to run. After all, it has some 50% of the float shorted and a direct link to Gamestop.  Again, this is not investment advice. I am merely using this under-the-radar-stock as a barometer of what's going on in the markets. I also picked it because it has (yet) to be "restricted" in any kind of trading as far as I know.  In that sense it should offer some decent feedback on underlying market mechanics vs. GSE which is heavily restricted on Robinhood and all eyes are on it. MAC may be under the radar a tad bit but its volume has been trading very, very heavy of course.

Again here is the daily chart.  May I ask again why was 60-70% or more of this float shorted when the stock was below $8 for most of 2020?? Are these hedge funds lazy, stupid, greedy and full of hubris or all four at the same time? (I answered my own question)

If I were to count the short term chart since the November low (which is when this short squeeze mania generally started), its only been 3 waves up.  

Prices are at a critical spot. They are near major horizontal support in which about $15 is the floor of that support.  So Monday will be a very telling day on the fate of this Gamestop Mall Stock. I suppose we'll actually know in premarket on what the week may be like. 
And even on a shorter scale, is this a falling bullish wedge? I guess we'll see. 




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