Tag: MOASS (Page 2 of 2)

Massive Disruption: Prepare For The MOASS

Massive Disruption: Prepare For The MOASS
MOASS Incoming

MOASS incoming. The feds are printing trillions of dollars, hedge funds have lost billions of dollars due to retail. People also seem to be worried about a possible recession.

And, the feds are now requiring major banks to hold roughly $1 trillion in high quality capital – enough to survive a severe recession and still be able to lend to households and businesses.

They crazy thing is only a few out of the 34 major banks hold more than $1 trillion in assets. How will this affect investors, and the common people?

franknez.com MOASS

Welcome to Franknez.com – today’s topic is rather grand. How prepared are you for a MOASS?

Lets get started!

There’s a lot going on here. I’m going to break major key points and give my overall thoughts and opinions on how everything ties together.

With so much money being lent out this means it’s all eventually going to have to be paid back sooner or later. Lets dive into the distribution of all this leverage and debt first with repos and how they work.

The Feds & Repos

The feds have been printing out a large sum of money to lend to banks, who also lend to financial institutions such as hedge funds. Well the feds have also been collecting billions in reverse repos from money going back into the repo market.

A repo market is essentially where a transaction between treasure securities and cash meet. In other words, they are short-term collateralized loans.

Money is continuously being printed and transacted back and forth through both repos and reverse repos. This loop is the reason why our dollar is becoming worthless every day.

Who Uses Repos?

Financial institutions such as banks and hedge funds both have access to this unlimited supply of leverage, or cash from the feds.

Repos are used as leverage to trade securities with the intention of profiting from the leveraged cash, and eventually paying the loan back.

While repos are primarily supposed to be used as a short term ‘collateral loan’, institutions take advantage of the loan to further leverage other positions in the market.

Hedge funds can use repo to increase their leverage, which magnifies both their potential gains and their potential losses. We know hedge funds have lost billions of dollars from shorting AMC and GME stock this year alone.

What Can Be Done About Excessive Repos?

The feds might be looking at ways to facilitate the amount to be borrowed by establishing a particular ceiling. However, I personally don’t think this is enough.

Some fundamental questions are yet to be resolved, including the rate at which firms (besides banks and primary dealers) would be eligible to participate.

How Much Leverage Do Hedge Funds Have From Repos?

In the figure below, we can see that 29% of asset managers (hedge funds) have direct access to repos from the feds. However, dealer who hold 41% and banks who hold another 20% can easily lend money to hedge funds with interest.

how much leverage do hedge funds have from repos
MOASS incoming

The problem here is that hedge funds are overleveraged and have too much power as a single entity. Hedge funds have been the root to economic downturns such as the Great Recession of 2008 and the Stock Market Crash of 1929.

In fact, it’s because of the Stock Market Crash of 1929 that the SEC (Securities Exchange Commission) was born. It was meant to protect retail investors from fraud and illicit activity from hedge funds.

Unfortunately, the SEC has only proved to be a lobbied pawn from hedge funds; slapping them with fines that have no effect or real consequence to the injustice in the markets.

Hedge Funds Face Major Scrutiny

Market manipulation has been exposed by a growing community of retail investors originating from the sub Reddit known as r/wallstreetbets.

The community has since grown outside Reddit and established a variety of subcommunities on Discord, Twitter, YouTube, Facebook Groups, and other forums across the internet.

This community of retail investors known as ‘apes’ have sparked a movement worldwide to expose the corrupt tactics hedge funds use to short stock in the market and bankrupt companies.

Some of which include naked shorting and dark pool trading, which CNBC’s Melissa Lee publicly speaks out on.

The attention is now on hedge funds. Both Republicans and Democrats agree strict laws should be imposed on Citadel Securities after the Archegos incident earlier this year.

And it looks like their lifeline is about to be cut off.

Large Banks To Hold $1 Trillion In Capital

Effective October 1st, thirty-four of the largest banks will be required to hold roughly $1 trillion in high-quality capital.

The banks are:

  1. Ally Financial Inc.
  2. American Express Corporation
  3. Bank of America
  4. The Bank of New York
  5. Barclays
  6. BMO Financial Group
  7. BNP Paribas USA
  8. Capital One
  9. CitiGroup
  10. Citizens Financial Group
  11. Credit Suisse
  12. DB USA Corporations
  13. Discover
  14. DWS USA Corporations
  15. Fifth Third Bancorp
  16. Goldman Sachs
  17. HSBC
  18. Huntington Bancshares
  19. JP Morgan Chase & Co
  20. KeyCorp
  21. M&T Bank
  22. Morgan Stanley
  23. MUFG Americas
  24. Northern Trust Corporation
  25. The PNC Financial Services
  26. RBC US Group Holdings
  27. Regions Financial Corporation
  28. Santander Holdings
  29. State Street Corporation
  30. TD Group US Holdings
  31. Truist Financial Corporation
  32. UBS Americas
  33. U.S Bancorp
  34. Wells Fargo & Company

Out of these 34 companies, only JP Morgan, Bank of America, Wells Fargo, and CitiGroup hold more than $1 trillion in assets.

In this list of the top 15 banks by assets, you can see just how far from $1 trillion a lot of these banks are. And this is just half of them from the feds list!

top 15 largest banks by assets
Top 15 largest banks by assets – MOASS incoming

With so many banks far off from reaching $1 trillion in assets, they’ll have to find the collateral from other means.

In my personal opinion, liquidation in the markets.

What Causes A Stock Market Crash?

A stock market crash is caused by those who bought stock on margin, lost value in their investments, and owe money to the entities that granted them those loans, according to Britannica.

A stock market crash is usually the cause of ‘panic selling’ or heavy liquidation in the stock market. With so many institutions owing other institutions money back, we’re going to see massive liquidation occur during the biggest margin call in history.

Hedge funds and short sellers now have higher margin requirements, and it looks like the feds just applied their own requirements to the biggest banks in the world.

Ladies and gentlemen, this is going to be the biggest opportunity of your life if you’re holding shorted stock, especially if they have a negative beta. Heavily shorted stocks with negative beta include both AMC and GME stock.

How Does A Stock Market Crash Affect The Average Person?

Unfortunately, the average person could lose their pension during a stock market crash and also find it difficult to obtain loans and mortgages. And if you own stock, your portfolio will suffer significant losses.

What Happens To AMC And GME If The Stock Market Crashes?

Stocks with negative beta tend to act the complete opposite during a stock market crash. AMC and GME holders will experience the MOASS as short sellers and institutions begin to cover their overleveraged positions.

But if you hold other common stock, keep in mind its value will drop. If you’re long, this could be seen as a great buying opportunity to add to your stock portfolio.

Other heavily shorted stocks with high short interest should also see a major increase in share price as hedge funds begin to pay their dues.

If the stock market crashes, it will be one of the biggest blessings for both AMC and GME shareholders as institutions will have to pay back every share they borrowed to short both these stocks.

Community, our time is coming. Banks have until October 1st to come up with the capital to fund their requirements. Expect liquidations left and right. Both the stock and crypto markets will be tanking.

And although AMC and GME are currently making upward moves, don’t be surprised if they fall back down one last time before shorts are inevitably squeezed from their short positions.

The MOASS we’ve all been waiting for is on the horizon. Get excited.

Gorillanaires

Franknez.com

Before you leave, I want to say that I appreciate every single one of you who’s read FrankNez since the inception of this amazing community. It’s been a long and powerful journey to say the least.

I’m excited to see what the next chapters hold with you. Keep paying the knowledge forward ๐Ÿค.

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AMC Stock August Prediction: Short Squeeze Update

AMC stock prediction
Could AMC squeeze in August? AMC stock prediction

AMC stock has found a new floor in the $30 price range. AMC’s previous floor was $5 before multiplying 14 times up to $70. Will AMC repeat this pattern? This would put AMC Entertainment stock roughly around $420 per share. And that’s without a short squeeze.

A lot of regulation is also being put into place. While the community might be taking this information with a grain of salt, we must ensure government bodies do their job. August 23rd is an important date.

franknez.com amc prediction

Welcome to Franknez.com – today I want to discuss AMC stock and August predictions based on the data at hand.

Lets get started!

If you’re not following me on Twitter yet go do that right now so you can be updated when I share a new article with the community. I also want to give a special thanks to apes sharing FrankNez content on Discords, Reddit, Twitter, and other social media platforms and forums. You know who you are.

AMC Community Fights For Justice

The AMC community has been fighting for justice since the beginning of this year when short sellers began to manipulate AMC’s stock price. The use of naked shorting has been exposed publicly thanks to the community.

Personalities such as Charles V. Payne (FOX) and Melissa Lee (CNBC) have been strong voices outside the community regarding the use of synthetic shares to drive the stock price down.

Melissa Lee recently came out about the SEC finally looking into dark pools. She shared an interview with SEC Chairman, Gary Gensler, regarding this manipulation.

While it might sometimes feel like we’re going around in circles, take the time to zoom out and realize change is actually happening right now. There was a point where no one was listening to us. So, if you’re new to the community, consider yourselves fortunate! We already paved the wave.

New Apes, Are You Negative In AMC?

If you’re a new ape who got in this movement as the stock was climbing, you’ve collected unrealized losses. However, this is just on paper.

You haven’t lost anything unless you cashed in your losses. Seasoned apes in the community faced the same reality many months ago so you’re not alone.

When AMC jumped to $20 back in January, majority of us got in as the stock was coming back down thinking it would go up. I purchased my first shares at $14 only for the stock price to plunge down to $5. I was negative $9k! So, you’re not alone, we’ve all been there.

Yeah some people sold, but those who held are now up thousands to tens of thousands of dollars. But we still hold. And you already know why. Shorts have not covered their positions which means you will be profiting very soon as well.

AMC stock seems to have reached a new bottom which is great for any retail investor looking to increase their position before we begin seeing higher highs and higher lows again.

When the stock originally came back down to $5, the community to advantage of the stock’s price. It was the perfect opportunity to increase our number of shares. The same scenario is taking place at the moment.

It’s The Number Of Shares That Counts, Not The Price

I’ve taken note that some apes in the community are waiting for AMC’s stock price to go lower so they can add to their positions. While adding to your position at a low share price plays heavily in your favor, it’s the number of shares that ultimately matters.

I had purchased 16 additional shares of AMC stock last week and one of my brothers had commented saying ‘too bad it’s only 16 shares’. To which my response was, those 16 shares at $1,000 per piece is already $16k. A $500 investment may easily convert to $16k during a squeeze (example).

If you’re a Patron or Discord member you saw I purchased an additional 29 shares today. By the way, if you’re interested in what other plays I’m buying, I update my portfolio on Patreon every month.

So, if you’re waiting for AMC to go lower so you can buy more shares, you’re going to miss this discount. AMC is demonstrating strong levels of support in the $33 range.

Breaking Level of Resistance

Trey’s Trades has predicted AMC would either drop down to a level of resistance in the $25 range, or take on a more bullish approach. We didn’t see this drop which means the technical data now points towards sustained levels of consolidation.

AMC Stock prediction – breaking level of resistance

What some apes in the community do not understand is that barcoding, or consolidation, is actually healthier than continuous declines. We could very well see AMC stock break new levels of resistance and consolidate in an upwards trend all month leading to the short squeeze.

This goes back to when we barcoded at $5. The stock eventually pushed all the way to $70. Could we see this type of multiplier in August? Absolutely.

AMC has the community to see this type of price action come to fruition. We’ve uncovered that although fundamentals may have influenced a stock price before, it’s truly based on the narrative of the shareholder and its community behind the company that drives the price.

NSCC-2021-010 Filing Confirmed, August 23rd

Proposal NSCC-2021-010 essentially prohibits the use of naked shorting and FTDs in the market. In this letter, FINRA confirms to rule this filing on August 23rd, page 3.

This leaves AMC with 6 trading days for the month of August with runway to follow its natural course up, without manipulation from short sellers.

Shorts have the option to cover their positions before another momentum upswing, or face bigger losses than AMC’s first runup. Hedge funds lost billions of dollars during the climb to $70.

AMC stock will continue to reach higher highs and higher lows, raising new bottoms as long as retail investors continue to buy and hold the stock.

Short sellers had the opportunity to close their positions at $5 and missed it. They now have the opportunity to close at $33 which means we could very well see AMC squeeze in August.

If they prolong the inevitable, AMC’s new bottom could very well be in the $200 range, given that chart patterns repeat themselves. I got to this number by multiplying AMC’s new bottom of $33 by 6. The common denominator from the stock’s previous floor.

What If Hedge Funds Don’t Close Their Positions In August?

If hedge funds don’t close their positions in August then regulations will get tighter on their practices. Margin requirements will continue to increase for short sellers shorting both AMC and GME stock.

Charles Schwab is a massive AMC shareholder and is in the ‘Top 10 Owners of AMC Entertainment Hodlings Inc’. They’ve been increasing their position in AMC all year. They are reported to hold a whopping 3.5 million shares in AMC stock.

Top 10 owners of AMC stock
AMC stock prediction – Institutional buyers will keep buying more at this price

Charles Schwab, like retail investors, wants to make money from this play. We could very well see the broker raise margin requirements or even liquidate positions without notice.

Big institutions such as Vanguard and BlackRock also continue to increase their positions. AMC entertainment stock is not a dead freaking cat. Institutions have noticed this once in a lifetime opportunity too.

They’re buying and holding the stock; waiting.

House Democrats Demand Tougher Rules

If you have not seen this yet, there’s a push by Democrats to broaden consequences for hedge funds.

“Lawmakers are considering imposing federal oversight on large family offices like Archegos and banning the controversial practice of market makers such as Citadel Securities paying Robinhood Market and other brokerages to execute investorsโ€™ trades, a confidential note recently sent to Democratic members of the panel shows”.

So even if short sellers don’t close their positions in AMC stock, outside forces are working together to prevent hedge funds from having too much power. This will play in the retail investors favor and give the stock runway to continue going up.

AMC Prediction For August

AMC stock will break the $33 level of resistance and channel an upwards trend leading to September if it does not squeeze this month. August could very well be the month when AMC squeezes.

My brothers and I have been adding to our portfolios just to play it safe. If this is the last time we will see AMC at these levels then we’re certainly going to take advantage of the price.

And while shorts keep increasing their short positions, it’s only a matter of time before they get halted from doing so, and are restricted the power to continue overleveraging their positions.

What I can tell you though is hedge funds are about to face the biggest margin call in history. Whether it’s in August or not.

What does your intuition tell you?

Franknez.com

Let me know in the comment section below what your intuition tells you. You have the data at hand, you’ve researched just about everything there is to know about AMC stock. Do you think AMC will squeeze this month? What’s your AMC stock prediction?

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