Hoo boy. It's back. Meme stock speculation hit another insane level yet again on Friday. AMC Entertainment Holdings (AMC), a stock that one analyst recently said is worth a penny, surged as high as $36.72 on Friday. Meanwhile, Blackberry (BB) surged another 12.7%. If it feels like Groundhog Day, that's because it's supposed to, my friends. There's something in the air. There's something about this market that signals that there won't be a return to "normal" any time soon.
| | | | | | | | Dear Reader,
Hoo boy.
It's back.
Meme stock speculation hit another insane level yet again on Friday.
AMC Entertainment Holdings (AMC), a stock that one analyst recently said is worth a penny, surged as high as $36.72 on Friday. Meanwhile, Blackberry (BB) surged another 12.7%.
If it feels like Groundhog Day, that's because it's supposed to, my friends. There's something in the air. There's something about this market that signals that there won't be a return to "normal" any time soon.
The regulators are too afraid to step in and stop any grassroots market pump by Reddit investors. And fundamentals are primarily out the window when it comes to stocks like AMC, GameStop (GME), and BB.
But that hasn't stopped me from actively trading in this situation. I've looked at ways to sell premium into the markets. I've also been buying shares and setting hard stop limits as shares move higher. I've also used the Volume Weighted Average Price to trade this stock in one-minute increments. Yes, this is so volatile that it requires that level of attention to detail.
If you're trading any of these stocks, make sure that you're actively doing so. You need to have your fingers on the mouse. Do not buy a bunch of AMC, BB, or any of these meme stocks and disappear for four or five days. There's too much risk, despite the upside of a meme-driven mania.
What Else Is Happening?
Last week, the Federal Reserve expanded its balance sheet YET AGAIN.
The Fed has expanded its balance sheet to an incredible $7.7 trillion. According to projections from the New York Fed, it could easily hit $9 trillion by the end of 2022.
What does this mean for the markets? It means that the S&P 500 is likely heading higher. One anomaly that investors don't talk about too much is called the Fed drift.
It appears that there is a strong correlation between the S&P 500 performance and the expansion of the Fed's balance sheet.
This goes back well before 2020, well before 2018. It's quite an image.
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So, if we see the Fed continue this action, we'll likely see a big move in the market to keep up with the Fed's actions. Don't sleep on this. We'll look for upward momentum to continue well into 2022 if this trend accelerates.
I am keeping it short today because I'm hitting the road for a different Florida beach.
I'll be back on Monday with your monthly F&Z score update.
Enjoy the holiday weekend. |
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