The GameStop stock situation has been big news for the last few days. Though we primarily look at futures, day trading news of this scale deserves attention.
What is happening right now is unprecedented: a sign of the times. It appears, that for the first time in history, regular, everyday people are coordinating the online buying of stock to make gains and “stick it” to hedge funds. To do this, they are coordinating and using the Reddit and Discord social platforms. Reportedly, pastors, 16-year-olds, stay-at-home moms, etc. are trading using the Robinhood and E-Trade platforms. The subreddit Wall Street Bets (WSB or /r/wallstreetbets) is the epicenter of the activity. Upon visiting, you will see much activity: enthusiasm, memes, and strategy to thwart the establishment. Mainstream media is also recognizing this as a reckoning of sorts.
In short, everyday people are witnessing their own collective power against Wall Street pillagers. Perhaps this quote sums it up (from one of the NY Times articles linked to below):
The traders’ motivations vary widely. Some reason that GameStop’s shares are a good value. Others are just riding the wave. And others want to squeeze Melvin Capital, a hedge fund that was shorting GameStop. They’re the ones quoting Heath Ledger’s Joker character from “The Dark Knight”: “It’s not about the money, it’s about sending a message.”
For further details on what is happening, feel free to read the these New York Times articles (though they may be pay-walled):
Keep in mind, the links above are from one news outlet. By all means, consider various interpretations with a healthy dose of critical thinking. Considering we are talking about Wall Street, who knows how each organization is aligned on the back end.
Yesterday, on CNBC, NASDAQ CEO Adena Friedman said:
“If we see a significant rise in the chatter on social media channels… we also match that up against unusual trading activity, [and] potentially halt that stock to allow ourselves to investigate the situation, to be able to engage with the company, and to give investors a chance to recalibrate their positions.”
When that news hit the WSB subreddit, you can imagine what happened: more fuel for the fire. Presumably, Friedman’s statement means NASDAQ has the technology to actively monitor various social media websites, determine impact, and then halt trading (for whatever “investigation” actually means). For many, the concerning portion is “…to give investors a chance to re calibrate their positions.” Does that sound fair? Does that mean hedge funds and conventional trading firms are given an chance to win according to casino house rules? During that time, are these firms adjusting their algorithms, variables, positions, neural networks, or conduct meetings to figuring out how to gain the upper-hand?
GameStop Trading – Thinking Beyond
This month, we saw another collective uprising in the U.S.: the storming of the U.S Capitol building. If you set the drama and distortions aside, some of these people sought truth based on the information they believed, even if they were misguided and took aggressive action. They believed they were being taken advantage of by the government, politicians, lobbyists. They believed they were lied to, not represented, and repressed. This is by no means a statement of support. It is an observation of fundamentals.
Price Action Courses and Software for Traders
For the last few years, there have been a number of significant movements throughout the world (Arab Spring, Hong Kong, Black Lives Matter, Indian farmers’ protest, etc. – there are so many more.). See for yourself. Type a populous country in Google with the word “protests” next to it. Look at the results.
It appears people, as a whole, do not like suppression and false information. People like livable lives/resources, harmony, and the truth.
Why is it that for almost any significant movement, there is an alluring alleyway of disinformation, or a narrative hijacking, that takes people on a course of separation and dis-empowerment?
Then in 2020 we have a worldwide lock-down situation. Many people lost their jobs and found themselves at home reflecting upon their lives, who they are, what they have been doing, what they seek. In such times of struggle and reflection, there is less room for nonsense. This time has encouraged awareness and truth seeking, though there appears to be well-defined grooves for telling people what they should think for just about everything. There’s always something to sell or someone ready to gain the upper-hand.
If news organizations have been paying attention, now is the time to get with it. Indeed, we may never know how many repressive agendas have backfired or what has gone on behind the scenes with certain government agencies, the so-called elite, or any other group identified by so-called conspiracy theorists.
Some questions for you to ponder based on your own experiences of life:
- Will people soon realize that the “evil agenda” has been separation? That most people do not wish to actually wish to quarrel or steel from one another?
- Are we at a turning point where people are realizing collective power?
- In recent years, have there been accelerations in change on global consciousness? Would the public be allowed to know such things or would they allowed to be reported on directly?
- Are people now, unknowingly, looking for unification on a global level?
- What stands in the way other than corrupt governments and institutions? Is that more of the “Great Awakening” that was promised than was successfully distorted through the Q narratives?
- What happens when “amateur investors” set their sights on tanking a pharmaceutical company for unethical practices? (As it is, in one of those articles above, a former SEC attorney is quoted saying that he believes the Reddit activity is probably not violating any law.)
- Consider the above and go back to this Wall Street activity. Look what the so-called “dumb money” investors are trading: GameStop, AMC, and BlackBerry. Dare we say that people feel a sense of passion toward those companies. These everyday people, with their hard-earned money, remember the joy of visiting a GameStop to purchase the latest video game, going to the local AMC with friends at midnight for that special screening or that first date, and effortless BlackBerry texting with actual physical buttons. Is that “dumb money” or are those people who want to support companies that are dear to their experiences?
- Do these “armchair investors” form a different type of organic/human neural network that cannot so easily be countered by conventional AI/neural trading systems?
- Essentially, are people seeking to “open source” the stock market or publicly crowd-source wealth?
- During this time of physical (COVID-19) separation, in what novel ways have you seen people unite?
Maybe the ideas/questions above show another perspective. We hope you have enjoyed the read and have a pleasant day!