Hank returns from the dead and takes a dump

DD 👨‍🔬

*** I am not a financial advisor, this is not financial advice ****

Good morning apes, I’m back.

BEFORE YOU SAY IT: Ik this technically makes me Kenny’s son; however, as per the laws of nature, a human cannot birth a retarded ape.

Boy is it good to be back, apes. I’ve missed you all. I’ve been gone for a while but have not left the cause. I’ve been lurking in the shadows, jacking off to DD, and huffing WD40. When I was just a child (a boy in Bulgaria), my father said he was going to the store to get cigarettes… I think he’s still there, must’ve been a long line for those Marlboros. Well apes, unlike my dad, I am returning to you.

Seriously though, thanks for all the messages and comments asking where I was. I fucking love this community. This has been an extremely busy week for me so I was not able to post any updates. My schedule is still pretty busy but it seems that the worst part is over, so I will hopefully be back more regularly to feed you that sweet confirmation bias. As many of you know, I have posted a few meme dumps. Well apes, today I will be taking another dump… A FUCKING DD DUMP (very sexual). So, this post will not be like the usual ones where it has one long theory, instead, it’s gonna be a few theories and ideas.

Covid-19, Jerome Powell, and January Squeezes

I think that everyone (us and Wallstreet included) has kind of brushed off just how crazy the end of January was. Five stocks squeezed to over double in value… all in the same week (BB, KOSS, EXPR, NOK, AMC)… oh yeah and this one stock had a mega-boner-super-asstastic-squeeze (GME). Short squeezes of those magnitudes are rare. But all of these stocks simultaneously squeezing is not weird… it’s unprecedented. For a squeeze to happen, a stock must be heavily shorted and a rapid price movement must cause the shorts to be squeezed out of their positions, which adds more buying pressure. So you’re telling me that all of these smaller, struggling companies had insanely high short interest and were squeezed at the same time and are not related? Yeah, I don’t buy it. Below I will explain why.

Major short squeezes happen every few years. Little short squeezes may happen every so often, but the big ones happen very rarely. Why are they rare? Shorting is at the core of many HF strategies. It can be extremely profitable. When a fund decides to go short what do they do? They always announce it on CNBC, make a report, stir up news, and hope that others go in with them (they usually do). They only short companies that are overextended or are on the brink of bankruptcy, so it’s usually a pretty sure thing. But sometimes, they’re wrong. Sometimes they’re wrong BIG.

Why do some of these monster squeezes happen? They usually happen because HFs overly short a stock and get hit by some bombshell news piece that squeezes them out of their position. Again, this does not happen often. Remember, HFs are run by very smart people with extensive resources and experience. When they make a bet, it’s usually pretty well thought out.

Enter Covid-19. Covid essentially opened the flood gates to shorting. Why? Because Covid promised to shut down the in-person economy for at least a year and promised to obliterate the stock market. Covid-19 created a unique financial situation. Obviously, it led to mass unemployment and a crushed stock market, but what was strange about Covid was that it crushed an extremely strong economy by prolonging and increasing unemployment and decreasing business activity without an actual economic disaster (i.e. most recessions happen because of a system or economic problem, this happened because of a virus, not a systemic economic problem). So, the general idea was that the economy, though strong, would be extremely slow for at least a year because of covid. What a perfect storm? The economy is in ruins, struggling brick and mortars will likely go bankrupt, you won’t make any money going long on stocks because the market will be bad, we won’t get a vaccine for at least a year, and the general economy will suck (these were their assumptions). So what did they do? They shorted…. a lot. Here is a chart of the volume and short volume of SPY:

Obviously, this does not give a full picture of the market, but it gives the general picture that shorting increased dramatically during the covid crash. So yeah, they shorted. They shorted a lot, and it makes sense, it was rational. Remember when I said that certain struggling companies would be pushed to the brink of bankruptcy? Wow, another great shorting opportunity. So, they shorted BB, KOSS, EXPR, NOK, AMC, and GME extensively because of the premise that the economy would be shit for a while and that already struggling companies would go bankrupt (especially ones relying on in-person sales). How could you not profit on that? It’s a slam dunk, right? RIGHT?

Well, they got two premises wrong. First, the vaccine came out way quicker than anyone expected. Second:

JPow turned on the money machines an unprecedented amount:

Now one saw that coming. I mean people don’t take the time to realize that the market is literally $100 higher now than it was precovid and we haven’t even fully reopened. No one could’ve predicted that.

So they were wrong - the market recovered WAYYYY quicker. What were the consequences of that? Well, basically every single stock rose significantly and must faster than expected and the market made a full 180. Now obviously, they weren’t short on everything in the market and still made tons of money on the 180 turn. However, I think that they over shorted the previously mentioned stocks because they thought they could hit the bankruptcy jackpot, which is why they all squoze together.

BUT, they wrong the worst with GME and that’s why it squoze the most. Out of all the stocks, GME had the most positive news in 2020. On top of that, because of GME’s debt and financials, they shorted it the most (we all know the famous 138%). That’s why GME squoze the most, it’s because the best things happened to the most shorted stock. That’s why we’re in this situation now.

Finally, I want to reemphasize how weird this all is. Please tell me how it is normal that 6 stocks, all formerly on the verge of bankruptcy traded in nearly identical patterns for the past year. Seriously look it up for yourself. They all squeeze at the end of January, shoot back up on February 24th, have a huge rise and fall on March 10th and are all trading significantly above their book value. HOW THE FUCK CAN YOU DENY THAT NOTHING IS GOING ON HERE? Do you really think that all of these stocks would trade in identical patterns like this? Yes, stocks trade in similar patterns all the time, but those are usually stocks that follow the SPX in an upward trend. I challenge you to find stocks that trade in such an obscure pattern so identically close to each other as these do. Seriously, does it make any sense that GME is trading at 5x what analysts say it should be? Same for AMC. It makes even less sense that all 6 of these stocks trade in an identical obscure pattern.

So why does that matter?

IMO, this observation highlights an absolutely terrifying market situation. We all know that naked/abusive shorting has been around for a while. However, it appears that because of low-interest rates and an ease of restrictions, it probably increased more during covid. There has been great reporting in this sub about the repo market, which demonstrates liquidity issues (for wrinkle brains, liquidity issues happen when you’ve borrowed too much and/or don’t have many liquid assets (cash) and is how literally every financial crisis happens because overleveraging creates a house of cards that eventually crashes). Liquidity issues are insanely dangerous in today’s market conditions. The FED has been aggressively pursuing quantitative easing (QE) policies where it buys bonds and other assets to help stabilize prices. This helps to push up the economy, along with low-interest rates. Well, when there’s a liquidity crisis, the FED literally cannot purchase the bonds and could lose control of the economy. What could be even worse is if we see inflation happen. We are already seeing it happen but according to JPow iTs tRaNsiToRy… yeah I bet that ages well. If inflation happens, then the FED will probably have to raise rates to slow down the economy, which will also hurt the market.

This terrifies me because it means that institutions are overleveraged because of the easy money interest rates and we are nearing a liquidity crisis AND inflation could force the fed to hike rates. What happens when all of these things meet? The house of cards falls. So, let’s say that there’s an economic downturn (not a collapse, not a recession, not a depression, but a significant correction). That will lead to margin calls. If you get margin called and you have a significant short stake in, oh I don’t know, a formerly struggling brick and mortar gaming retailer that just so happened to tongue punch the fart box of the entire market, that makes you…….. FUCKED. Now let me make this clear, we should not be praying on the economy to collapse, that’s idiotic. A collapsing economy means people lose their jobs, pensions, and people die. However, we need to be cognizant that we may have found a way to profit off of an impending correction.

GME and SPY

My DDs have also been laced with comparisons of SPY, VIX, and GME. As we know, GME has a negative beta so it is usually inversely proportional to SPY, which is extremely abnormal. GME seems to be directly proportional to the VIX. The VIX spikes during market volatility, which usually comes with margin calls. You put the rest together.

However, I found something very, very interesting. According to my chart, it seems that GME is consolidating to earnings and the annual meeting. Obviously, this could be broken at any time or I could be completely wrong. It could also do what I said it’s doing in my last DD and just keep forming new consolidations. Here’s what I drew for GME:

It seems that they line up right around the blue question mark, which is earnings. The annual meeting is the very next day 6/9 (lmao nice). For those of you who just popped a quarter chub because you saw the yellow lines, yes those are my FTD cycle lines. The next one is sometime next week. Refer to u/criand’s DD because I am crowning him FTDaddy.

It would make sense for GME to consolidate up to this point. Last earnings we saw a big move (not in our fucking favor though). This earnings, however, comes before the meeting, which is significant. As many of you have pointed out, this meeting could expose the massive number of synthetic shares through voting numbers. I have also noticed that there has been absolutely no news relating to GME for the past few weeks, which is very strange considering the barrage we’ve been getting the last few months. Could this mean they are saving something(s) up for the annual meeting? This is all speculation but it would make sense to me.

So, remember that date, 6/9 (lmao)? Well, look at SPY:

I call the red line the death line because it’s where I call BS on this absolutely crazy pricing based on historical pricing TA (this is a week chart btw). See that apex, guess what day it converges? 6/9. Coincidence? Yeah probably. Something to give you hope and help you sleep at night? Of course. Just to give you a little more confirmation bias, check out RIS (again one week chart), last time we were this oversold, the market literally died. Considering what I said above about liquidity, we could be seeing some major, major shit happen soon. AGAIN, this is just absolute speculation and conjecture and is probably not related…

The point of this is that SPY cannot keep these prices up forever especially considering the likelihood of inflation, the possible liquidity crisis, and the overleveraging we are seeing. GME, moreover, should not be behaving like it is without something fucky going on underneath. Something’s gonna give soon, apes.

The Fucking midday volume spikes

The stuff above was mostly my theories and opinions, this is probably the best actual new DD that I have in this post. I have said in many of my DDs that there are these random midday positive volume spikes. I always noticed them, as I’m sure many of you have, but never took the time to document them or to do anything with them, until now. Below is a table of these spikes from the past few weeks:

EDIT: This is what the volume spikes look like (don’t mind the blue and yellow lines, just look at that giant green dildo in the middle of the day:

The commonalities in all of these are: they are positive volume (i.e. price goes higher), they are the highest candle in their given day BY A MILE, they happen between 11 am-2 pm, they happen on absolutely no news. This is only from a few trading days, so it is by no means exhaustive. However, I went through and looked and this has been happening for a very long time now and it is consistent and common. Seriously check it out for yourself. Go on a 1-minute time frame on any given week and you’ll find at least one of these random spikes. I also looked at AMC… same exact thing happens with that stock (goes back to my theory about them being related). So what does this mean? Quite honestly I have no clue. It’s strange that it happens in the same time period, is the highest volume in the day, and is positive. Could it be a short covering? That’s what I’m guessing. However, I need more data to make that conclusion. My next DD will probably be about uncovering more to this. Note that I did not cherry-pick the above data, this is just the most recent data from the past few weeks, this trend is extremely persistent and I intend to look into it more and invite other apes to do the same. IMO, this probably has something to do with a smaller time frame FTD cycle because of how common and persistent it is. So, expect my next DD to be something about this. Sorry I couldn’t do a full DD on this right now, again don’t have the time currently, so this is just a little cock tease, but expect something about this in the future.

With that in mind, just wanna give a shoutout to u/criand for being an absolute god. This guy pumps out DD I like I pump out turds after Chipotle. His recent DD on the FTD cycle is the best FTD cycle DD on this sub by far and he basically cracked the FTD cycle code.

Closing Thots

Apes, I’ll say it again, none of what is happening with GME is normal. I could make a laundry list of the abnormalities - the price being 5x analyst predictions but not budging, OTC trading, random volume spikes, FTD cycle, difficulty to borrow, relatedness to other shorted stocks, consolidation patterns, gigantic drops, etc. etc. etc. The point is, something’s going on and something’s gotta give. What do all of these abnormalities make me?

HARDER THAN EVER

Thanks again for understanding why I was gone for a little bit, I really appreciate it. Idk when I’ll be coming back because the next few weeks are not super predictable for me and could be busy… but I will be here… watching…. reading…. jacking off. As always, stay strong apes.

TL;DR

Hank is back. Thanks for your patience. Look closer at the January squeeze. Group of stocks moving in unison. Not a coincidence. Covid created perfect storm for all of this. Economy could correct/crash. Inflation/leveraging/liquidity bad. SPY too big. GME might benefit from this. Midday volume spikes exist. I am curious. I will investigate more. I have a half chub.

*** I am not a financial advisor, this is not financial advice ****