Whilst I am a great believer of anything can happen, and I follow my rules as much as my brain allows, there is much talk around on the GME saga with others now coming to the fore. It appears (to me) that there is a serious threat to how the markets operate, and the upsetting of the apple cart by retail traders on social media. Whilst it seems inconceivable that financial systems could collapse, there is (without FED and others intervention) a possibility that this could happen in the short term and the pullback we are experiencing currently (fib. levels, etc) may be ‘different this time’ in as much as this play against the hedge funds is novel and will almost certainly succeed if there is no, or not quick enough, intervention and the house of cards tumbles.
Such an event would be sharp and fast whereby the exit doors would be very difficult to reach without (at best) severe loss.
Your views would be much appreciated. I understand it would not be advice per se.
I think you summed it up best by the title of your post .
The actions of last week is just another example of only one of thousands of variables that impact the market at any given point in time. The market is a risk environment and there will always be “new” variables whose impact is unknown.
For every buyer there has to be sellers and for every seller there has to be buyers. The short term volatility caused by such events is an example of the balance being out of whack temporarily.
Hedge funds have been around for a while and whilst not exactly in the same camp as the internet warriors, they will have their own opinions being expressed by weight of money (either supply or demand) and potentially influencing price too.
They are also just another variable and sometimes they might be on the right side and other times not. We’ll never know in advance what the impact might be.
There have always been Wallstreetbets type variables hanging around the markets that pop up from time to time going back to the Bucket Shops of the 1880s - 1920s, to the Wolf of Wall Street type ‘groups’.
They do have a short term effect until the market adapts and adjusts, either through free market trading, or through regulation.
Take a look at how well SPA3 Trader handled GME, based purely on price movement. If the hedge funds used price action and set stops (and had an “anything can happen” mindset rather than being fixated on their original hypothesis) they should have closed their short positions on the breakout at $8 - $9. And most certainly at $20! With an absolute final exit at $40!
if i could start a new thread i would, so feel free to move this.
April 30 2021 close, my broker is advising IOZ UP 1.48%, VAS down 0.75% at close [VAS in line with market.] Unsure how many IOZ shares traded at that price, interested if anyone has an opinion.my opinion is not worth much, but would hazard a guess IOZ will fall 1.48%+ on next trade. For mine, it just puts a false valuation into the market. Why do this?
IOZ jumped 69c at the closing match off. Looks like someone put a big order in that was too high and got caught at the final matchoff at 4:10pm. Either that or there was a price manipulation for whatever reason. There was around 30 thousand traded.
It should return to normal on market open Monday.