We Just Had a 2,117% Short Squeeze! transcript

What's up everyone? Well, I wasn't planning on doing a second recap today, but I also wasn't expecting to see a stock go up 2,117% this afternoon. So, I broke down for you in my episode last week, the three scenarios that I thought could end the cold streak. The first was a stock that genuinely had such good news, you'd be insane to short it. Now, I was hoping that would happen. a stock maybe a biotech company with really just amazing breaking news sends a stock up two three 400% it keeps going higher and just like that we've got some momentum.

The second scenario was you have a stock with mediocre news and the dynamics of that particular stock is that the company doesn't need to sell shares on the open market and so you don't have that extra selling that sometimes comes when companies put out news but they recently filed a shelf registration and that news headlines an opportunity for them to sell into the market which suppresses the price and in a colder market ends up that the stock ends lower than before the news even came out which is not great.

The third scenario was that we would have another one of these foreign listed securities, a Singapore, Malaysian Chinese stock that has no news whatsoever and shorts get caught. And that's what happened today. We had another no news Chinese stock and it went up literally 2,17%. The ticker is Rto. So, if I go back on the scans right here, right after the closing bell was when we got the final surge. And let's see. We'll just mark it here on the chart.

So, it hit a high of $8, which was $2,17% return. What a move. Nearly 200 million shares of volume as it peaked at $8. I mean, by the end of the uh trading session here, it had 232 million shares traded today. This again kind of leaves many of us baffled. It's a Chinese stock with absolutely no news whatsoever. There is no fundamental news to support the move. So why'd it go up? Well, we can only speculate. Uh I I sigh because we've seen I you know I've been trading for a long time.

We've seen these moves more often than I can count and we never really know exactly what gets them started back here. Some of them pop up like this and then go all the way back down. And that's probably what shorts were hoping for. A quick squeeze up to a dollar a share, rejection from a dollar, a fade, and it's over. But this one rallied again. And because of the fact that it closed in the previous session back here below 75 cents a share, the halt bands were every 15 cents.

So if it went up 15 cents in less than 5 minutes, it would halt for five minutes. And so this stock halted a bunch of times. Halting up, halting up, halting up, halting down, halting up, halting up, halting down, halting up, halting up, halting up again, again, then halting down once, twice, three times, then halting up once, twice, and then right here it halts up at about $2.50 and it resumes way up at $4 a share. That's unbelievable.

And look at this. As the price went higher, the divergence of volume declining. I think the market makers took advantage of short sellers. And what they did is they pushed the resumption price so high it would force those shorts to cover. They cover and then they pull the rug right back down and it goes all the way from four back to under two. Then it rallies up, halts down, and then at the close goes from $3 all the way up to a high of over well, let's see, $8 a share, right?

Right there, $8 a share. And then it comes all the way back down. What an unbelievable move. So, one of the things I actually was talking about this morning was that um you know, I'm not a huge fan of trading um after the open these days because I don't like getting caught in halts. These halts can be very unpredictable. In fact, we had a halt this morning on VIA right here. Va, it halted up at 620 right here. And while it was halted up, it showed a resumption of 550.

So, it's halted up and then it's showing it's going to resume down here. Now, it ended up resuming up here. It dipped for a second. It pops and then it sells off. The fact is, while a stock is halted, you cannot sell your position and you can't buy it. If you're in a short position, you want to cover, you're stuck. And so, you're at the mercy of whatever the market makers want to do. And so, if they want to drop it $3 a share while it's halted, they can do that.

And we've seen it happen before. If they want to rip it $3 a share, they can do that as well. And so, we've had stocks where it looks really good. You're caught in a halt going up. You think it's going to open higher, it opens lower and then instantly halts down and you're smoked. Completely smoked. The biggest loss I ever had, $240,000 loss in one trade. I was read $275,000 on the day was from a stock that I got caught in a halt and it opened lower and halted down and I was in two halts going down.

It was a disaster. So, you know, I'm not opposed to trading during the, you know, regular market. Um, but in pre-market, we don't have halt levels. So, it makes me feel like I've got a little bit less risk. I just don't like the feeling of being stuck in a trade. I don't like that feeling. And so, if you traded RET today, well, you had to get comfortable being in halts because this thing halted a lot. And then, of course, after hours, it made finally its biggest move of the day.

Biggest move of the entire day, right? But still on relatively light volume compared to earlier, which is an interesting divergence. So, it sells off and kind of bases out. Are you going to have another shot at it tomorrow? I don't think so. I would look back at FTFT from yesterday. FTA, FT, FT, sorry, also had a parabolic move. Uh, not quite as big. Came back down and then it kind of unwinds. And I think that's more likely what will happen with RETO.

This is the high right here. And I would be surprised if it retests that level. I think probably there will be some traders that go for that, but I don't think it's going to have the volume or the ability to retest those highs. That's my gut feeling. I could be wrong, but that's that's my guess. So, after this big move on RTO, um, we ended up having WAFU. This is another Chinese stock squeezing up as you can see right here.

So, this one goes from A140 up to 320. A big move right there. Then we had, let's see, AIXI. This one pops up, squeezes up Chinese, no news, comes all the way back down. So traders kind of jam this up looking for the next one, but nope, this one didn't hold. Higher volume on the red candle. Quite a bit higher. WW, this is another Chinese company. Pops up, dips down. So what you can see happening now is exactly what I discussed when we were first talking about what happens the at the end of a cold streak.

What happens at the end of a cold streak is you got a stock that makes a huge move. Whether it's because of great news, whether it's a grinder that just kind of finally pulls away, or it's the third scenario of a no news Chinese stock like what we had today. This is tricky because now traders are looking for no news Chinese stocks for the next move. But we don't understand really what was going on behind the scenes that allowed RET to make such a big move.

And it would be kind of ridiculous to assume that every Chinese stock will have the same thing going on behind the scenes, those same dynamics that would allow a similar move. But speculation being what it is, traders are jumping in what's moving. And so I'm thinking tomorrow in the pre-market session, we will likely wake up and see a number of Chinese stocks leading the scan to have no news. I think we should focus on which one is the most obvious.

Today, Va was the most obvious stock in the pre-market session and it continued at the open. Even though it wasn't as clean as I would have liked because of the halt levels, it was the most obvious pre-market and it continued. Yesterday, we had FTFT, which was not the most obvious pre-market, but it once it started sort of gaining some momentum, it maintained the the status of being the number one stock all day. So, let's pay attention to what is the number one stock tomorrow. there's a very good chance it'll be a foreign listed security with no news and that's riskier, but as long as it's obvious, I'm probably going to be comfortable trading it.

I want to be careful jumping from stock to stock, like jumping from WNW to AIXi to, you know, Wahoo. That's where you can start to get diminishing returns. It's musical chairs, traders jumping from stock to stock to stock, but none of them really holding up that well, and then you end up getting smoked on some of these. So, you want to be really careful. This was a Singapore stock that popped up. N AMI, this is a Chinese stock that's popped up a couple of times.

So, this is what I'm kind of expecting for tomorrow is that there's going to be a bit of disperse attention. It might be chaotic in the pre-market session as traders are jumping on whatever is moving. So, be careful, manage your risk. And there's no reason to, you know, try to hit a home run or do anything crazy. Size down a little bit. When you've got heightened volatility, it's a good time just to slow down, try to capture some of the opportunity, but do everything you can to avoid taking a big loss.

So, you know, today for me, I didn't take any trades this afternoon. I stuck with my, you know, pretty pretty solid rule that if I don't make money pre-market, I don't want to break the ice later in the day. So statistically I make the most early and on a day where I've made a lot early I have a cushion to take some risk but I didn't have that cushion today. So, I you know was I feel like made a good decision um and didn't overstay my welcome and as a result I sit exactly where I sat um you know 8 hours ago or 12 hours ago uh zero trades so nothing in the small account nothing in my big account and um you know that's fine but tomorrow I would of course love the opportunity to break the ice but I don't want to end up chasing the backside of a move.

So, if I trade RETO tomorrow, wouldn't that kind of be just trading the backside of this big move again? You know, could this come back up and gain some momentum? It could. It's not the most likely scenario. So, I don't really expect it. I expect that traders being speculative are looking for the next move like this. Rather than trying to trade this from $5 to $50, look for the next stock they can trade from 50 cents to $5 a share. that's realistically what people are going to be looking at.

And uh so, you know, I'd keep my eyes open for it, but do everything you can to manage your risk. So, thank you guys for tuning in to this second special recap, and I'll be back at it streaming first thing tomorrow morning at 7:00 a.m. Eastern Standard Time. And a link for a twoe trial is pinned at the top of the comments and posted in the description. So, if you want to watch over my shoulder and use the same software I use, two weeks for 20 bucks.

I think you'll get a lot out of it. I think you'll really enjoy it. So, I hope you check it out and I'll see you back at it 7 a.m. tomorrow morning, less than 12 hours away. All right, I'll see you then.