Time To Buy Some Shorts
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In Today’s Newsletter:
Watch List: Things to keep an eye on this week
Tweet: Experts Are Scared
TikTok: Benefits of an LLC
Stock Pick: Short Squeeze Season
Quote of the day:
If you don’t make mistakes, you’re not working on hard enough problems. And that’s a big mistake. — Frank Wilczek
Weekly Watch List
The stock market surged last week as traders & investors welcomed the biggest drop in inflation over the last year. What started off as a small rally off the lows in July, is quickly turning into a potential recovery & bull market as now almost 50% of the losses from the bottom have been recovered.
What could have gone wrong didn't go wrong and now investors are turning the rally off the bottom into a FOMO inducing melt up that might even get in the way of the Fed. We can be back up to higher levels on the S&P sooner rather than later.....Or at least until we see Powell again.
Remember one month does not make a trend, but every trend starts with one month. Just think about how freaked out the markets were when inflation was at 8.5% back in March… now we are at 8.5% again and people are cheering. In my mind, this was the best ‘worst’ data we could have gotten.
This week major retail companies will be the focus as many are reporting earnings. We have Walmart, Home Depot, Lowe’s, Target, TJX, Ross Stores, and Kohl’s. Along with their earnings, the U.S. Census Bureau will be releasing July retail sales numbers. We will see if retail continues to be heavily impacted by inflation and consumer spending. If retail has a surprise positive earnings week, we could see a jump across all markets. Crazy to think we are on the cusp of entering another Bull Market. How long could it last? Only time will tell.
Monday
Tencent, NIU, Weber, Clear, and ZipRecruiter report earnings
NY Empire State Manufacturing Index
NAHB Housing Market Index
Tuesday
Walmart, Home Depot, Agilent Technologies and Sea Limited report earnings
Building Permits from July
Housing Starts from July
Industrial Production from July
Wednesday
Cisco, Lows, Analog Devices, TJX, Target, Synopsys, Keysight, Amcor, Bath and Body Works report earnings
Retail Sales from July
Business Inventories from June
FOMC Meeting Minutes
Euro Area GDP
U.K. Inflation Rate
Thursday
Applied Materials, Kohl’s, Estee Lauder, NetEase, Ross Stores and Tapestry report earnings
Philadelphia Fed Manufacturing Index
Existing Home Sales
Euro Area Inflation Rate
Friday
Deere & Company and Foot Locker report earnings
Would love to hear any of your predictions in the comment section! What do you think will be the best/worst-performing stocks this week?
Tweet Of The Day: Experts Are Scared
TikTok Of The Day: Benefits of an LLC
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Stock Pick: Short Squeeze Season
Short Squeezes are back. For those of you that do not know what a short squeeze is, it happens when many investors short a stock (bet against it) but the stock’s price keeps going up instead. This causes the people who were shorting the stock to have to buy the stock to cover their losses, which can make the stock explode 🚀. Just remember the GameStop and AMC craze in 2021.
Fast forward to today and it seems these crazy opportunities are back again. Just look at Bed Bath & Beyond (BBBY 0.00%↑) . Their stock prices have surged 222% over the past 2 weeks!
Someone that does not know what a short squeeze is would look at this company and think they invented the next iPhone. In reality, they are just one of the most heavily shorted stocks on the market. If you look back at GameStop, their stock price skyrocketed over 3,000% within weeks of their short squeeze.
My guess is Bed Bath & Beyond could just be getting started. If you look at some of the option activity today on Bed Bath & Beyond someone is betting hundreds of thousands of dollars that their stock price is going to explode this year. Possibly even hitting $80 a share!
Blue Apron( APRN 0.00%↑) and Weber Grills (WEBR 0.00%↑) are two other companies that fit the same profile as Bed Bath & Beyond.
Bed Bath & Beyond is the third highest short interest stock with 55% of its shares being shorted. Weber Grill is number one with 64% of its shares shorted and Blue Apron is second with 57% of shares shorted. I can see both Blue Apron and Weber exploding if traders start attacking the short sellers like they are doing with Bed Bath & Beyond.
One of these 3 companies could turn into this year’s GameStop.
If I invested $1,000 into GameStop at the bottom before their short squeeze it would have turned into $30,000 at the peak!
What do you think the odds are one of these companies explodes over 1,000%?
Did any of you make or lose money with GameStop and AMC last year?
What other stocks are you seeing with short squeeze potential?