Tag Archives: short selling

Gamestop Snags Short Sellers

It’s all about GameStop.

The word is out.

It’s only been a few days, but by now the story is already taking on legendary proportions.

While being cheered on by Elon Musk, a big group of young retail traders gathered on the “wallstreetbets” Reddit forum.

There they shared their enthusiasm to drive up the stock price of the nearly-defunct video game retailer GameStop (NYSE-GME).

A Short Squeeze On GameStop

The net result was that they began putting a major squeeze on big short-selling hedge funds like Melvin Capital. In pacing major bets that the price of GameStop would keep going lower, Melvin Capital literally exposed itself to an infinite amount of risk.

That firm was nearly bankrupted as skyrocketing prices forced it to cover its short positions. As the GameStop enthusiasts kept bidding up the price, the only way out was to take a huge loss.

GameStop Trading Chart

And that’s exactly what happened.

The short-covering brought Melvin Capital a loss of roughly $3 billion. But the damage didn’t stop there.

Along the way, the trendy fractional-share online brokerage Robinhood also took a beating, as it hurried to raise $1.5 billion overnight in an effort to stay afloat.

The Reddit crowd rejoiced as the price of GameStop went higher and higher. The little guys found new strength in numbers.

GameStop Transits

The astrology surrounding the trading action shows that GME was particularly ripe for its role in the mayhem.

Transiting Jupiter (A) conjoined the GameStop First-Trade Neptune in a classic signature of wild speculation.

At the same time transiting Uranus (B), still at the position of its recent station, formed a powerful “finger of fate” yod pattern with First-Trade Cupido and Zeus [an irresistibly forceful community] and an opposition to First-Trade Poseidon [explosive new ideas suddenly coming to light].

Even if they weren’t aware of the astrological background, the Reddit crowd certainly had great timing!

Astro-Trading Silver at the Summer Solstice

When I was interviewed by Michael Yorba on his Traders Network radio show yesterday, we had a great chance to discuss this weekend’s Summer Solstice and it potential impact on the markets.

The Summer Solstice will arrive at 6:51 a.m. EDT on Saturday morning, June 21st.

This event is carrying some extra weight this year because of the recent activations of the 90-degree cardinal point at the beginning of Cancer by Venus and Mercury. These events have already shown their importance in moving the markets; the Summer Solstice is the Sun’s activation of that same 90-degree point in the cardinal axis. That’s just one of the reasons that W. D. Gann gave it so much attention.

To get an idea about the potential impact of the Summer Solstice on stock market trading, be sure to check out this chart for the historic effect on the S&P 500. As you can see, our back-testing of this index during this annual event gives us good reason to consider adding some short positions to the Financial Cycles Model Portfolio at this time.

But not all markets are likely to decline at the Summer Solstice. Take a look at what happened to Silver when this event took place last year:

Silver Summer Solstice 2013
Silver responded emphatically to the Summer Solstice in 2013, with the precious metal climbing by nearly 13% in the month of trading just after this key planetary event.

Needless to say, if you’re interested in trading precious metals, be sure to your homework thoroughly! Even though we got a big bounce in Silver at the Summer Solstice last year, and even though the Summer Solstice coming within three trading days of an isolated low in Silver about 76% of the time, this event only triggers a trend reversal to the upside about 29% of the time. So a rally in Silver (or in any other precious metals) is not a foregone conclusion following the Summer Solstice this year.

You’ll get more details about the Summer Solstice activation of the 90-degree cardinal point and its creation of a major zodiac pressure point for the markets in this recording of the complete 10-minute interview with Michael Yorba during yesterday’s show on the Traders Network:


click here to download or listen on your mobile device

By the way, during this interview I mentioned to Michael that I’m currently working on some new planetary cycle research to help fine-turn our understanding of the trading top that’s just ahead of us in the equities markets. This new report on “How To Time The Next Market Top” will be available in about a week; CLICK HERE if you’d like to get on the list for early-bird notification as soon as it’s available.

Don’t Blame Ben Bernanke

The mainstream financial media are giving Federal Reserve Chairman Ben Shalom Bernanke all the credit for the current stomach-wrenching plunge in the stock market.

When Dr. Ben talked about the Fed possibly “taking its foot off the accelerator” in its massive debt-buying program if the economy continues to improve (not to be confused, he said, with hitting the brakes), the mere thought of it was enough to send stock prices into free-fall.

At least that’s what the media have been saying. But the media always like simple stories and clearly-defined heroes and villains. So it’s not surprising to see the bearded professor getting the blame.

But as astro-traders we know better. As I’ve been pointing out repeatedly for some time now, we have in hand all the necessary ingredients for a major market sell-off, with the pressure intensifying in late June and early July.

My private clients and our members at FinancialCyclesWeekly.com have gotten ample warnings of this bearish potential. We been adding short positions to the Financial Cycles Model Portfolio for the past several weeks, and we’ve ideas about specific trading strategies for the protection of trading assets.

At the beginning of this week, during my radio interview on Michael Yorba’s show, I helped Michael and our listeners pin-point the date to expect a market reversal– Wednesday, June 19th.

In fact, when Michael Yorba asked me if I thought we’d start to see some selling pressure on Tuesday, I emphatically told him that we should look for a downside move on Wednesday instead. (You can hear the complete interview by CLICKING HERE).

The triggering factor, as I explained to Michael, was not Ben Bernanke, but Jupiter’s unusual alignment with the Sun. (CLICK HERE for the full explanation of this remarkable event.)

I just figure that Jupiter and the Sun are both a whole lot bigger and a whole lot more powerful than the Chairman of the Federal Reserve, so why not give them the credit for the crash?

While a lot of investors were pretty upset when the sell-off started this week, the readers who were following our latest astro-trading strategy for asset protection had smiles on their faces. And those who got our report on “Protecting Yourself in an Irrational Market” had an opportunity to pull in extra profits from the market while everyone else was losing money!

By the way, the report on Protecting Yourself in an Irrational Market is still available, and the information it contains is still relevant, since there are additional challenges to the stock market coming up in July. You can get a copy of this report as an instant download by going to http://bit.ly/protect13.

 

Our Gold-Plus Elite Members Ring the Cash Register

Compared to putting money in a savings account at today’s prevailing rates, a return of 0.96% is actually pretty respectable.

But can you earn 0.96% in just one week?

If you’re one of our Gold-Plus Elite members at FinancialCyclesWeekly.com you can!

That’s just what happened today when we closed out our short position in Ixia (NASDAQ – XXIA). We discussed this stock during our members-only conference call on Sunday evening, August 12, and then sold XXIA short on Monday, August 13 at 15.20 a share.

Our members began the trade with a buy stop set at 16.50, and then moved it to 15.15 at the opening today to lock in profits.

And then ka-CHING! They collected their 0.96% return when the buy stop was hit at 2:48 this afternoon, putting money in their pockets just one week at a better rate than they would have gotten in a year with most savings accounts.

That’s what the astro-trading advantage is all about– great work, team!