Yesterday was a BIG BIG day for the meme stock universe.
GameStop (GME) was up 28%
AMC (AMC) was up 20%.
Clover Health (CLOV) was up 9.9%.
Newegg (NEGG) was up 8.2%.
That had us going wild like we just beat the Hawks for the Minnesota State Championship.
So what is going on here?
The answer is two fold.
First, the market is going up because of the Pfizer (PFE) vaccine approval.
But the bigger issue is that we are seeing good old-fashioned short squeezes.
These stocks have been shorted like crazy – and there’s probably some naked shorting involved.
So traders are bidding the meme stocks up to get the shorts to cover, creating more upside fuel.
But, there could be something else going on – hedgies getting in on the long side to participate in these short squeezes.
Look at this daily chart of AMC:
If you need stocks that can move like lightning, you have to get in the meme stock game.
Yes, you can play with cryptos, but they don’t have the same liquidity.
Expect the boom and bust cycles to get bigger, harder, and faster as more and more traders try to game these short squeezes.
Think about it.
This ride ain’t over.
In fact, eventually, we could see an “ultimate capitulation.” When hedgies decide there is more money to be made on the long side.
Think about it.
If you were a hedge fund, the smart move might be to cover your shorts, and start blasting stocks like AMC higher.
The mainstream TV talking heads will blame everything on Apes.
And you’d walk away with the money.
This story is only getting started… but you heard it here first. Good luck out there.