The DOW fell more than 600 points on Friday, losing more than -3.2% in the worst week since January to October. The S&P 500 and NASDAQ could not avoid losing themselves, with both indices losing -3.3% and -3.4%, respectively. The reason for the losses is the short circuit of all the short circuits.
It started on January 25 when a group of retail investors was identified Gamestop Corp (GME) As a purchase on the WallStreetBets Reddit forum. This daily group of traders continued to encourage each other’s GameStop stock collection and call options, and this created short-term compression, causing pain for hedge funds to bet against the stock. Thus, the Robinhood trading program took away GME shares and several other shares. After resuming trading on Thursday, Robinhood limited the number of shares a retail investor could buy.
All in all, short-term hedge funds have lost nearly $ 20 billion to date, including GME on Friday, which lost nearly $ 8 billion. Still, short sellers are mostly holding their bear positions or being replaced by new hedge funds that want to bet against stocks. Shares of GameStop, which was borrowed and sold in the short term, fell nearly 5 million in the last week and fell 8 percent in the short term, according to S3. According to S3 Partners, most of the short-term coverage occurred on Thursday when stocks fell for the first time in six days.
At the same time, traders on the WallStreetBets Reddit forum are preaching about holding and not selling the line that they see as giving / losing to hedge funds. Next week should be a fun time. Other stocks on their radar Nokia (NOK), AMC Entertainment Holdings, Inc (AMC), Koss Corp (KOSS), Express, Inc (EXPR)and BlackBerry Ltd (BB).
It should be noted that the DOW and S&P have had both negative effects over the 500 years, with January losses at -2% and -1%, respectively. NASDAQ, on the other hand, holds strong with a monthly gain of + 1.4%.
Basic levels to watch next week:
INO.com and MarketClub.com