It’s Out Of Control …

by | Feb 17, 2024

Hey traders, it’s Bryce here.

It’s not funny anymore, the short squeezes are out of control.

Well … it was never funny if you were a short seller.

I don’t root for short sellers to blow up. Tim Sykes and I try to spread awareness about the dangers of short selling! But most are too entrenched in their ways.

A message to all short sellers: If you still have any money left to your name, SWITCH STRATEGIES!

On Friday, February 16, MicroCloud Hologram Inc. (NASDAQ: HOLO) continued the short squeeze to a shocking 6,400% move.

I can’t overestimate the insanity of this spike. We were watching it on day one. And Sykes had shares when it was trading at $3 … 

Here’s Sykes’ blog post about the HOLO short squeeze.

Look at this move:

HOLO chart multi-day, 1-day candles Source: StocksToTrade

Now, most small-account traders don’t have the resources to trade a volatile stock spiking to $90 per share. Don’t worry … 

HOLO isn’t the only stock moving in this market. Not by a long shot!

The bullish momentum is off the charts in 2024.

And since the market is closed on Monday: These stocks have more time to build hype.

Tuesday is going to be explosive!

Here’s what I’m watching when the market opens … 

Low Float

The strongest catalyst in the market right now is a short squeeze.

But they aren’t accompanied by an SEC announcement that says: “YooHoo, this is a short squeeze!”

For new traders, it can be difficult to determine a true short squeeze vs some random crap stock with bullish momentum.

Sometimes, we see short sellers boast about their positions online before they blow up and delete their post history. In Sykes’ blog he includes Twitter screen shots of short sellers outlining their trade strategies during premarket.

One of the biggest signs there’s a short squeeze in progress: Look at the stock’s float on StocksToTrade.

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Here’s why it matters: The short seller strategy is theoretically correct. These are trash stocks and the price will crash back to the starting levels eventually. But when there’s a low supply of shares and a lot of short sellers in the same stock, the chance of a squeeze goes through the roof.

Short sellers have to buy back shares to exit a position. If there’s too much bullish momentum, some of those short sellers panic and buy back shares to exit. That ADDS to the bullish momentum and creates a domino effect of short sellers blowing up.

If they keep getting back in and trying to guess the top, there’s no telling how high it could go.

A low share supply exacerbates an already oversaturated strategy.

Anything below 10 million shares is considered a low float. HOLO: 950,000 shares in the float.

Keep an eye out for Tuesday spikers with a float below 10 million shares.

Trade The Price Action

We can’t just buy and hold.

There’s no telling how high the short squeeze will go.

And there’s no telling when it will fall apart.

It’s still a crap stock. If you buy and hold, you’re gambling.

And gamblers get eaten alive out here.

There IS a process for profits. And traders ARE banking out here.

But there are rules … 

  • Cut your losses quickly.
  • Follow the hottest trading patterns.
  • Only trade the best stocks.

For new traders, try to focus on ONE pattern at a time. Like the strategy we use on Friday afternoons.

One trade a week aint a bad way to start.

But if you’re looking to capitalize on the upcoming Tuesday momentum … 

Prepare this weekend and watch a live stream.

Things will move fast when the market opens. Make sure that your watchlist is up to date and you’re using the right patterns.

Get ready.

At 9:30 A.M. Eastern on February 20, we’re off to the races.

Cheers,

Bryce Tuohey