Hey everyone,
Plenty eventful week, so let's dive into it.
Omincron, China Default, inflation OH MY!
So this week has been a cluster fuck for the price. Primary attributing market factors at the moment seem to be a triple threat.
- The big one, Omnicron. Whether it is as lethal as other variants, or whether it's harmless is hotly being debated but as countries look to tighten there border controls and start internal lockdowns the markets are reacting accordingly.
- China seems to have more official news around defaults/liquidity wind up. With official news around Evergrande now filtering through. It's hard to tell if this has hit other markets yet, but generally speaking it will flow outwards. First China (which is has/is doing), then rest of Asia, then rest of the world. London/U.K will be particularly hit by this as there is a thing of buying properties in London as a investment strategy by Chinese and Arab investors.
- Inflation, Powell started to change his use of language. No longer was high inflation "transitory" it was now "persistent", along with it came the announcement that he was changing his tune on the whole money printer, that while not getting turned off was certainly getting slowed down.
Over all it's been a tough week for the markets, which in turn leads to a tough week for us.
As a total aside someone asked how does the falling markets work well for us when liabilities should reduce with assets. So I'm going to try and put out a walked through example of a default under these conditions. Not sure when that will come though as I have something else in the works that needs a lot of work done on it.
Bitcoin/Crypto dump
This one is fresh off the press, given that it's happening as I type this. Bitcoin had a massive $1 billion dump at 12am EST today.
There exist a relationship between crypto and price rises, generally speaking crypto dropping by 10% or more on a day with no news is normally followed by price rises the following week.
There is only 3 data points to this though, so it's not exactly a concrete relationship, but it's worth mentioning and I'll mention it on Monday's look ahead.
NFT/86k theories/Fast selling tickets
So the NFT's sold out by Monday afternoon according the silverback himself.
Hope you got one if you were trying to get one. I am sitting here in Scotland just patiently waiting for our round of NFTs lol.
As for all the theories around the number of NFT's issued (86,000) I have seen a lot of different ideas. Same as with the 741 Gamestop theory I don't deny there is likely important symbolism in the number but there are too many different theories too a number that is too vague and as such too many incorrection connections can be made.
Also Spider-man has broken records as the fasting selling pre-sale tickets ever, this applies worldwide.
Comparing to other cinemas
Interesting post I saw the other day that I wanted to expand on.
In total AMC dropped 23% this week, while other cinema companies did not drop as drastically, Imax only dropped 2.74% and Cinemark fared a little worse at 3.63%
The logic behind the OP's post was sound, same conditions that effect AMC effect these companies, so why is there not as severe a drop?
But I wanted to expand on there comparison by looking at other metric's Namely Siggymandering and Option Abuse.
For Siggymandering we see that both Imax & Cinemark have less off-exchange (Darkpool) use on the day and on average with AMC's off-exchange use on the day being 55.7% and 30 day ave being 56.3%.
For Imax and Cinemark respectively we have 35.6%/36.1% & 41.6%/42.2%
Then we take a look at short volume, with AMC leading in every category again.
Then onto option use, AMC has significantly more option use. With 12 stacked chains, including weeklies. Both Imax and CNK have less option use with only monthlies, quarterlies, and CNK has leaps.
Over all it points to a higher degree of manipulation within AMC.
This is also despite the fact that CNK has higher SI of float than AMC does, which again leads into the idea that there is more hidden with AMC that puts the onus on keeping the price down.
GME speculation/news
I've seen a lot of baseless speculation this week, couple of debunked posts (that I won't repeat to stop the mis-info spreading).
I predicted this last week, which is fine, we'll likely see it continue up until Wednesday Night's call.
What I have seen though is a couple of the Loopring guys and Gamestop NFT guys on twitter (the official ones) become more active and more importantly becoming more active with each other. Mostly Benin posts that can't be read into but if there was an order to not talk that's now being lifted they may feel more comfortable talking to each other.
Another thing is Jordan Holberg (who only has 9k twitter followers, if you have twitter you know what to do) is the principal engineer at Gamestop and has made contract with the owner of Gamestop.eth.
RRP
So it's been odd week for Reverse Repo.
The number has stayed steady in that $1.4 to $1.5 trillion range. The interesting thing though is that number of counter parties seems to be trending downwards, meaning ave per party is going upwards.
One week a conclusion doth not make, but if it continues we could begin to see who the bag holders when the bubble pops are.
Or it could be we see the number of counter parties increase again and we start the upwards trend again.
Time will tell, but I will say this both counterparties and ave per party decreasing would actually shock me so much I'd shave my cats and wear their hair as a wig lol.
DEBT BALANCE
Another odd week.
We saw large injections of money on Monday and Tuesday, with Wednesday and Thursday just taking the money straight back out and then some!
Above that there seems to be talk of an agreement to extend the ceiling, nothing concrete but the can kicking here seems to be even shorter than the last time.
It's all interesting.
Glitchtopia
Okay, so I've flip flopped on this, and will likely continue to flip flop on this (news alert, it's okay to change your opinions on things).
GME's Short interest was shown as 113% earlier this week. This is the one I am most confident to call a glitch, as my first reaction was to check AMC's and then the wider market and what I saw was that the number of shares shorted on 31/12/2020 was being used against the current outstanding shares of companies and being used to work out SI.
This applied to every stock, but if you remember GME's SI back in Dec 2020 was 140% it's float.
Next we have Fidelity lending out shares glitch, this was one that was given an explanation but has, thankfully, sparked a wave of shares getting DSR'd again.
Explanation was manual data entry error by one of the lenders.
The final one is (which is one I found curiously enough) Short volume for off-exchange venues not being reported for Thursday until 12 to 2pm Friday EST, which is very odd indeed. I've been covering the Short volume figure, along with off-exchange volume, as part of my daily siggymandering posts for about 3 months and they've never been late.
What's my big take away from this? At the moment it is we are all falling victim to something called observation bias. This is when an event is taken as rare because it is rarely observed (or the opposite, it's seen as common because it's commonly observed) when the reverse is in fact true.
Easiest example I have of this is whales, (not the unusual kind) on our planet our larger species of whale are very rarely seen mating, and even rarer is it, that we see them giving birth. We know new whales are being born so both of these things most be a common occurrence that we are just not observing due to the places these are taking place.
We apes are now collectively watching whales give birth by seeing these glitches, and that's largely down to increased interest in watching the stock technicals in the past year and even larger interest in now out hunting for glitches in the last few weeks.
It's a practice I'm adversed to discourage, as more accurate data is better for everyone. It's just one I want people to have caution on.
To DSR or Not to DSR
The debate rages on, this is up to you guys.
Honestly, I think it's helping or at the very worst isn't hurting.
That being said, some people can't for whatever reason, that means if you can and are willing to then you really should to compensate for those that can't.
S&P 500 B.S.
Okay last bit of nonsense.
Let's make this clear.
AMC & GME are not joining the S&P 500 any time soon. I've seen a raft of selective screenshots and quotes, but everyone is either intentionally or accidentally leaving out one of the most important eligibility criteria.
We must be positive cash earning in the last quarter, and the last 4 quarters must be net positive.
While AMC has a chance to be cash flow positive in Q4, we are looking a little further out for GME, and for both we are likely looking at 3, if not just 4, cash flow positive quarters until we are net positive over the previous 4 quarters. This is largely down to how small our cash flow positive quarters are likely to be.
This isn't FUDing, Shilling or anything else. This is realism. We don't need to be apart of the S&P 500, though it is a great boon, and until the real chance of that inclusion comes we should focus on other avenues of thought.
Twitter/YouTuber/Influencer drama
I still don't care, I realise there are now two distinct camps forming so you can consider me Aun'Shi (if you get that reference you are a nerd, and I love you for it), I'll walk between both being friendly with both and actively look to stay out the intra political community bullshit.
Let's keep our eyes on the prize apes!
Parting words
Also I want to talk about having faith in a long term thesis.
There are a lot of newer apes that will be experiencing the first dip and, rightly so, shitting themselves because it's a scary experience (if you're an older ape DO NOT FUCKING BELITTLE THAT FEELING, YOU SHAT YOURSELF TOO THE FIRST TIME IT HAPPENED! WE ALL DID) just know this, when you make a trade based upon a sound thesis, you constantly need to re-check the thesis after any big price movement (up or down), if it's changed then you change your actions.
If it's not changed (which it hasn't for AMC) then you have faith in your thesis and you hold strong until either you are proven right, or something material has changed.
Hope you found that insightful,
Here's my socials for more, and my thoughts on other stocks & crypto.
Peace!
No comments:
Post a Comment