AMC falls more than 8% the day after market makers halted trading, though the SEC has the power to halt trading as well.
The theatre chain stock had risen to more than $34 per share shortly after the market opened.
But a trading halt seized retail momentum causing the stock to plummet.
Coincidentally, GameStop was also halted as the game retailer soared to almost $200 per share.
Was this illegal? And should it be illegal?
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Who can halt trades?
Market makers, exchanges, and the SEC can halt trades.
As AMC falls, retail investors continue to ask why this ongoing manipulation in the market continues.
The question is who halted the trade of AMC and GME stock?
Prior to a halt, individual exchanges typically make an announcement alerting investors and keeping them informed.
Shareholders did not receive an alert.
So, did the SEC halt trading or was it market makers?
Most retail investors wouldn’t be surprised if it was both as the SEC Chairman Gary Gensler has not addressed retail’s concern.
The SEC has failed to address retail investors’ issues and has neglected to enforce proper measures against short seller market manipulation.
What is the purpose of halting trades?
The purpose of halting trades is to refrain investors from having a massive selloff, or in ‘meme stocks’ case, to refrain the stock from squeezing shorts from their positions.
Our financial system is in a great state of emergency at the moment.
And retail investors have created a disruption for just about every corrupt player in the game that feeds off of the small investor.
So, what can retail investors do about this manipulation in the market?
Retail investors must persistently raise awareness about the issues the community is facing.
The moment retail stops fighting for a fair market is the moment greed driven politicians and institutions win.
With enough energy and time, more and more people will begin to wake up to the truth.
Related: How do hedge funds manipulate the stock market?
Will these halts have a long-term effect?
AMC’s and GameStop’s trading halt might have slowed down the process of squeezing shorts, but only for a moment.
See, the data hasn’t changed despite the market manipulation.
And it’s true, the longer short sellers drag this momentum play the bigger the event will be.
That’s because the number of shares being loaned have reached an all-time high and they continue to multiply.
This applies to GameStop too.
Eventually they’ll have to buy these borrowed shares back.
How long will that take?
That will depend on how long they can afford to hold their positions since they pay a fee to short both AMC and GME stock.
Be sure to check out this article here for more on what will trigger AMC to squeeze plus data, chart analysis, and patterns.
Days to cover is going down
I want to share this chart with you really quick.
The grey line going up shows short sellers have more shares now to cover than they did back in January and May/June of 2021.
This instantly tells us AMC’s next runup is going to surpass that of May/June’s all-time high.
The purple line shows us the ‘days to cover’.
Every time AMC’s DTC went down, we experienced new ATHs.
We can see in the chart that the days to cover is coming down again.
As Trey says, this is not a dead cat.
Expect AMC’s next runup to be more violent than June’s runup last year.
Will this be MOASS?
You’ll have to keep an eye out on the short interest data to identify how much percentage goes down during the climb.
This will give us a rough estimate of how many short sellers are left in the play.
And as AMC falls today, keep in mind that the entire market is also falling.
Big price moves are coming for AMC, be prepared.
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About The Author
Since GME went above the “Floor of 157” I tried to short it but got greedy and put in an order to short at 195 that didn’t fill. 188 would have filled; my broker this time told me the had “located shares but the hard-2-borrow fee would be 7%” which they never did before. The broker has been bought by the Wokest of the Woke–MS; I have a bad feeling I’m not going to be allowed to short the peaks of GME which I did 8 times last year netting 12,777 clams. Last year’s hard-2-borow and other fees in my shorting totalled about 3 clams–so Something Is Going On. Think! I could have gotten 2K clams if I had shorted 2-3 days ago! Anyone else out there shorting the peaks and covering in the valleys or am I the only one? In a sane world GME would be trading at 50-60. Two things:
1) “The Floor is 157”: GME sold some shares in 2021 to take advantage of Fools. Dividing the loot gotten by the shares sold gives 157 a share. Below that there are “influence[r]s” who can “work” against any dips so it’s unsafe to short below 157—which I’ve learned the hard way.
2) Just what is “Days to Cover”? Explain. I have several possibilities that make interference. Also, how are hard-2-borrow fees calculated? Now having over 200K free and clear in my account may mean the broker allows me to do “cheap” shorting; they’ve closed their branch offices and phone waiting is almost measured in hours and they don’t even answer their e-mails and other messages. They did tell me their “back office” two years ago was working only 2 days a week which is why mailed checks took almost 3 weeks to be processed..
Speaking honestly, I lost my cool when I noticed the halt. The market manipulation is more ridiculous than ever. We’ve been patiently holding, making noise, and just when we think its our time, we are left scratching our heads.
Oh and I wasn’t sure if the short interest was updated today. Is it still around 21%?
Thanks Frank! 👊
SI is a little below 21% right now Joe, I update it here daily: https://franknez.com/list-of-momentum-stocks-short-interest-and-utilization/
And I know how you feel brother, thanks for commenting brother 👊
Halting stock should be 100% illegal. This is manipulation that is one sided!
I agree ☝️
So long as they are able to halt trading, what’s to say they don’t just keep doing this…no?
Let’s start a discussion!
Stacked deck.