The probability of AMC squeezing has always been there, and it’s always been relatively high for the most part.
But what’s the probability of AMC squeezing in June?
After all, with the market at an all-time low, it makes you think why wouldn’t shorts close positions now, right?
But most importantly, executive order 14032 is going into effect this June.
And this catalyst could very well just be AMC’s highest probability of squeezing.
Let’s discuss it.
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The markets are at an all-time low
More market value has been lost today than in the Dot-Com crash.
The Dot-Com crash saw a loss of $4.6 trillion.
Today, the NASDAQ’s decline has been a whopping $7.6 trillion.
To put things into perspective, the Global Financial Crisis lost $2.3 trillion, and the Covid-19 selloff lost $4.4 trillion in value.
Hedge funds have overleveraged their positions in heavily shorted stock such as AMC and GameStop.
Retail investors caused Citadel and other short sellers to lose billions last year due to the runups.
Both AMC and GameStop have high short interest above 21% each and an all-time high number of shares on loan that need to be returned.
So, short sellers are in a tough position, especially those with overleveraged positions.
This bear market could provide short sellers with an incentive to close large short positions before the market begins to reverse.
The SPY (S&P 500) has touched $400 per share several times in the last 5-day trading period.
While it has traded below $400, it’s important to note the markets have to bottom out at some point.
The question is, is this the bottom?
And if it is, will short sellers take this opportunity to close out positions in AMC and GameStop?
Executive order 14032 is right around the corner
If you haven’t heard of executive order 14032 yet, you’re missing some incredible information here.
This order was previously responsible for prohibiting institutions from using Chinese securities as collateral on January 27th, and May 27th of 2021.
These are the dates before AMC began to run up to $20 per share in late January, and when it began to run up to $72 per share at the end of May, early June.
Institutions were given their collateral back for 365 days on June 2nd, 2021.
Since then, AMC and the entire markets have gone down.
This grace period will be over on June 2nd of 2022, where institutions will no longer be able to use these Chinese securities as collateral, resulting in margin calls.
The difference this time, however, is that the number of Chinese securities affected has increased from 30 companies to 70+ companies.
Margin calls could be significantly larger than the previous two times based on portfolio holdings.
Incredibly, both AMC and GameStop short sellers are more in debt now than they were in January and June of last year.
The amount of FTDs and shares on loan have snowballed to new heights for over a year now.
Does this increase the probability of AMC squeezing in June?
Given the current market circumstances and executive order 14032 going into effect soon, June could prove to be a highly important time for AMC shareholders.
Is an AMC short squeeze guaranteed in June?
No, nothing is every truly guaranteed in the markets.
But is the probability high?
I’ve mentioned this in previous articles and videos before, AMC is a short squeeze play whether this catalyst triggers a short squeeze or not.
AMC’s short interest data pointed towards a runup in January and May/June of last year – and the data says it’s not done running.
Coincidentally, Chinese collateral was removed during these two runups, and now it’s happening again.
And while today’s share price might discourage investors, I find it’s more intriguing to look at the data rather than at the share price.
It’ll change your perspective.
What do you think?
Is AMC going to squeeze soon?
Leave your thoughts in the comment section of the blog below.
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Related: Executive Order 14032 Could Be a Big Deal for AMC Stock
I doubt the squeeze will happen. Now days the biggest crooks and fibbers win.
As the overall market has been depressed in last few months. I am praying, led by AMC and GAMESTOP all the beaten down stocks squeeze. The good news is History and stars are in favor of a 6 week rally starting this week. Amen.
SPX is the S&P500 not SPY
For as long as it takes… I HODL for you as well…
Brother… great read and you are much appreciated….
I’ll HODL until the shorts are covered! It costs me NOTHING to sit here and watch the HFs bleed money!
Hell yes it’s squeezing soon! The markets collapsing, China and Russian financial systems in peril, inflation, oil prices, recession almost certain to get worse this year going into 2023, rate hikes to continue 50 to100pts more this year … all point to a MOASS sooner than later.
I’m more bullish than ever. HF’s trading their AAPL stock for GME/AMC … come on! Pensions doubling and tripling their positions in AMC … come on!
Anyone who can’t see this play for what it is, is a moron. 🤑
Stars are line for a great run up in June and who knows maybe the squeeze if shorts close their positions. The overall market and economy is a much different place than last June.
Its becoming harder and harder for sleepy Joe to extend the executive order with what is going on in Ukraine and Taiwan…
Will see but regardless I’m holding.
Well stated. While there’s no guarantee of an AMC short squeeze being kicked off by this particular bill, you’re right in that the conditions for a short squeeze are forming, including inflation, DOJ and rhe summer movie blockbuster season coming up.
I’d be shocked if it doesn’t at least reach ATHs.
If AMC doesn’t squeeze in June I’ll wait longer. Millions feel the same way. Nothing but naked/fake shares are flying back and forth and now millions around the world know what’s going on. The actions of these people is criminal, and you can spare us the excuse of loopholes. They lost this one, Period! They need to cover, move forward and hope to see another day.
What is to stop Joe Bidden from Delaying the executive order 14032 . Once again and screwing retailers? Nothing ! Look for him to do that . I pray not but do not trust him. He is doing everything he can to destroy this country . Why ? I don’t know , but e knows he won’t be alive to see the worst of it.
“For years Wall Street tried to attract retail investors to the markets encouraging the public to invest in the stock market then when retail investors begin entering the market in larger numbers Wall Street started throwing a fit with negative headlines articles and bought accounts on social media or speaking negatively that someone invested in good stocks. Wall Street never ceases to amaze me and I think the increasing use of algorithms by market makers that double as hedge funds and other large financial firms are just another example of that l. ..think about this for a second ,the purpose of algorithms are to amplify trends and or create dislocations within the markets ,so for example a hedge fund could utilize algorithms to pump is stock price in order to entice retail traders to buy call options and then abruptly reverse the trend crash the stock then retail traders holding the bag and then the Wall Street hedge funds ( institutions)walk away with all of the premium they collected …fucking the retail investor once again ..this of course is only one hypothetical scenario which I think is true and presently the way it is now ,but I think it’s clear algorithmic trading by large financial firms poses a significant risk to the markets and especially for retail investors .Wall Street knows this and unfortunately the SEC is basically silent as all of this is happening .I’ve said it before I’ll say it again this is not a fair or transparent stock market not in the slightest and that’s exactly why we retail investors continue supporting our favorite company AMC here ,as we stand up for a free fair and transparent stock market accountable for their actions we want all of the retail investors orders to be routed directly to transparent exchanges rather than dark pools .And we want all investors to have access to the same real-time data from exchanges better private feeds which is currently only available only to Wall Street ultimate we just want to stock market that offers a truly level playing field for all investors !!! “
Quote from a smart man!
Let’s start a discussion! Leave your thoughts below.