ANATOMY OF A SHORT SQUEEZE

What causes stocks to go squeeze higher? I can enlighten you into the sentiment of money managers and how they are scared to death of being caught in an epic run, like NFLX or more recently TSLA. Valuation is unimportant in the immediate term. All that matters is fear and greed.

Are the shorts fearful of the stock going higher and are the longs greedy? If so, that stock might be setting up for a monstrous run.

I’ve been studying correlations all of my life. I like to know why things happen. Sometimes they’re random: but most of the time they’re by design. There are certain traits that are common in all short squeezes, none more than shares in the float. If the stock doesn’t have full institutional interest, like NFLX, CMG or GMCR, there must be a small amount of shares in the float in order to get the stock going–preferably under 20 million.

Of those shares, I like to monitor stocks that have at least 10% of its shares sold short. Due to liquidity concerns, I am looking for stocks that trade at least 100k shares per day. And, one of the most important factors is the “pain threshold.” If the stock hasn’t been moving higher, there is little incentive for the shorts to cover. You want to look for names that are up more than 10% over the past month.

Now we get to the proprietary stuff.

Since hundreds of you are now under a free trial membership of The PPT, you can view the screen I am about to reveal. It finds stocks that have jumped by more than 10% in its “Daily Hybrid” score, which is a ranking mechanism that combines both technicals and fundamentals to get a daily read out. When the technicals explode during a given day, which is decidedly different from the prior day, the Daily Hybrid score will spike.

I’ve studied thousands of short squeezes and none of them start without a large jump in daily hybrid.

A perfect example of what I just described lies in the share price action in ESI. Here is a recent history of the Daily Hybrid.

Had you bought the stock based on the upgrade to buy on that 40%+ hybrid change, you would’ve been long under $19 with the stock now trading above $25.

The last part of the puzzle is technical ranking. The technical scores must reach a minimum of 2 on a scale of 5, with 5 being the strongest.

Here are the results:

Since tomorrow is the last day of your trial, take advantage of what I am giving to you now and view this screen for more results tomorrow. Since it’s dependent on daily hybrid movers, the population of stocks will change daily.

This is what The PPT is all about, finding an edge in the market by taking all of the data available to us and deciphering it via the power of a predictive algorithm. There are many aspects to the tool. In no way is it one dimensional. But if I had to isolate just one aspect of the tool that I find to be most useful, this is it.

It’s one giant short squeeze. If you’re trying to access the two day trial for The PPT and 12631, sorry, you are too late. The servers at 12631 got smashed due to the unexpected influx of vagabond leeches, numbered in the many hundreds. As a result, we had to close the window of opportunity. Trust me when I say, it’s value add, so don’t be afraid to give it a try.

I closed up on the day, thanks to VHC and CZR, two of my larger positions. However, it wasn’t a gangbuster day, which has me a bit disappointed. I am chockfull of ideas and know exactly what stocks to trade. But I am in a “sell only” mode, as I am fully invested, made my bed; now it’s time to unwind and book gains.

The market is frenetic, and in my experiences, this is when you take the perverted foot off the pedal. Nonetheless, it should be noted, the villain is cloaked in cowardice, afraid to risk; therefore, he is afraid to live.

“Snatch his life away and leave him with nothing: break him.” (BEAS, 1776).

I have a screen in The PPT, one that I consider to be of the golden variety. It tells me the future.

The following stocks will undergo a short squeeze (pay attention)

VHC
HLF
YRCW
ANGI
TEAR
PSUN
ONE
BPI
DMND

MOAR tomorrow.

The coal trade is never an easy one. The government wants to eliminate them; West Virginia wants to stick a pole through their heads. It’s a constant ebb and flow; but the direction of the primary trend is lower. My JRCC trade is dead. However, due to the extremity of recent gains, I’ve opted to hold onto it, just to see what happens.

Many traders are viewing this tape second by second, clamoring for a pullback. They view any downtick in the tape as a sign that we’ve topped. Therefore, validating their own stupidity to remain cautious. Well, you can do that if you like. However, you’re missing out on one hell of a gamblers paradise.

Quit your micro managing and trade the tape.

Stiff pullbacks are underway in AAPL, TSLA and a variety of momo stocks. Some of my momo plays are weakening too, which gives me a bit of pause. However, I have a lot of cushion after the last week of unbridled advance. I’m also “re-excited” about the move in ARG. I am in for the $100 roll and will sell it north of $104.

In short, go eat a sandwich.

CZR is my top holding, as of yesterday, and now is in the process of burying the bountiful amount of shorts who bet against it.

Reminder: I am the Rubicon. Don’t cross me.

NOTE: I added to IMMR and now find myself fully invested.

The market continues higher, following bullish remarks from David Tepper.

I like ANFI, CZR (top holding), VHC and IMMR. Also, as you know, I am long term bullish on FRO.

Some other stocks crossing my radar include ONE, SODA, DMND, ESI and TEAR.

This is a short squeeze tape and the offal is certainly in the ordinary drinking water for mass consumption. This isn’t going to last forever, but it isn’t going to end today.

Therefore, enjoy the grandeur of unchecked market melt ups and be sure to make sacrifices, human if possible, as a form of tribute to the stock markets gods.

I want to speak directly to short sellers, of the sordid variety.

The following stocks have castrated you over the past week.

TSLA (a regular knee slapper) +55%

ROIAK +44%

GMCR +31%

THRX +25%

SQNM +23%

OMER +21%

MCP +20%

ESI +20%

UBNT +20%

You’re basically giving your money away. You might as well make a bonfire out of it and roast some marshed-mallows with the kids, or donate it to some cancer charity, than fiddle around with explosive short positions. Knowing that the needle is pressed firmly to the temples of shorts, spearheaded by the retarded electric car company, TSLA, the following stocks may start running soon, joining the others, in a quest to bankrupt your dumb ass.

LEAP

WWAV

BRLI

LRN

AVG

HLF

GME

SODA

FRAN

VHC

Trade happily.

Have a look inside behind the curtains that are made from iron and titanium.

If locusts should descend on all of the rice patties east of Baghdad, we will make a fortune in ANFI.

From my vantage point, being the wise owl that I am, ANFI has a hard on for $10. Does anyone care to take the other side of this Godly trade?

I didn’t think so.

Tomorrow we shall make even more money and spend wildly in the after-hours, buying up diamonds and minks, spinning out in Bentleys–as half the world starves to death.

The market is never going to pullback. Having said that, just 35% of stocks are up today. I am immune to this pikerism, as 90% of my holdings are higher, which means I am either a genius or knee-deep in late stage rally plays. Being that I’ve already established myself to be a genius, I know the latter is true, ironically.

I do not want to throw a wet towel on your cocaine party. We all enjoy a good drug infested extravaganza. But this isn’t sustainable. Whoever is buying SCTY up here should be shot.

Nonetheless, I, myself, own a good deal of “heroin stuck in arm” stocks and will need to unwind these positions in a blink of an eye.

Whenever the market decides to rest, these gambler stocks will be mugged for 10% inside of a day. But that’s just the conservative side of me, HORATIO CLAWHAMMER, talking smack. The personality directing my positions is shooting midgets out from carnival cannons–long ANFI, FRO,  CZR, RBCN, JRCC, VHC etc.

Over the last few days, I’ve made millions of dollars and now sport gains upwards of 24%. Taking profits during this profligate period of extreme excess is not only recommended, but suggested.

I, however, will ignore my own advice and continue throwing dice–laughing and crying like a manic drunk off 100 cups of coffee.

I am still long 1 million shares of FRO, legacy position kicking higher. The Last of the Mohicans no more.