Updated: May 1, 2021
The craze. WallStreetBets has pumped GameStop stock along with AMC and others. What does this imply for the markets?
Due to the 53% loss most hedge funds have suffered from this brutal attack by WSB, Hedge Funds were forced to sell a portion of their shares on Friday, shaking the market, similar to the dot-com bubble or the 2020 crash.
Notice, the VIX and VXX are ticking upwards. With volatility rising and the stock market taking a hard knock from all time highs last Friday, it seems like the worst is not yet to come.
Wall Street Bets has a new trend - pump the VIX/VXX; calls on silver. Well well, someone is smarter than they look. Pumping the VIX/VXXX and buying calls on silver may cause one of the greatest market meltdowns since 2020. With the market in a bubble, the Fed buying treasury notes, and stocks hitting top-level Fibonacci retracements, pumping the VIX won't end well.
In the last Fed meeting, Jerome Powell mentioned "the Fed is not supporting the market. The market is doing well from good vaccine news". Interestingly, most people had always believed that the Fed was pumping the market, preventing a market decline. This announcement caught most investors off-guard, giving room for the big red candle on 1/29/2021.
For market participants, it's best to hedge this week. Who knows, this one may be the beginning of the end. Though futures are up, I think it's still safe to hedge this week to protect your assets from a potential downturn.
I called the crash of 2020, and made multiple instagram posts about it. Read them here, on the Investor Corner Instagram page.
Note: I cannot legally give financial advice. This article does not constitute as financial advice.