What's up, everyone? All right, in
today's episode, I'm going to walk you
through a 130%
short squeeze. The move began in the
after-hours session yesterday and
continued into pre-market this morning
with the stock continuing to move
higher. What is interesting is that this
stock is easy to borrow. That means it
is free to short it. You do not have to
pay locate fees. I generally find that
when a stock is listed as being easy to
borrow, it means there's so many shares
available to sell that they they can't
even charge you for it. So, they make it
free to borrow. And when it's free to
borrow, naturally, you'll have a lot of
short sellers who say, "Well, I don't
have to pay any locate fees. I might as
well short it and see what happens."
Well, that's what ends up occurring and
we as a result typically see more
resistance as the price is moving
higher. So, it's not able to give us
these really big clean parabolic moves
unless shorts get trapped and then
they're forced to cover. So, on this
stock, we got a news headline that came
out in the after-hours session about a
merger, merging two companies together,
$750 million business combination. Um
this is not an uncommon catalyst. We do
see this quite often, especially in the
small-cap space, um two small companies
merging to create one big slightly
bigger company. So, really nice move in
the after-hours session, as you can see
right here from about $2.20 all the way
up to 434. So, it goes up about 100%.
Pre-market, it sells off right away.
Kind of starts to look like it's doing
an inverted head and shoulders pattern,
but then it doesn't pull away. It pulls
back a little bit longer, kind of a
little longer sideways, and then it
starts stair-stepping up here around
7:00 a.m. So, at this point, this is
when I start to watch it. Pulls up to
through the VWAP, volume weighted
average price, up to a high of 390, dips
back down, squeezes up to double top
with the pre-market high right there at
434. Pulls back, pops up, and flushes
back down. Sellers bring it down. Then
it comes back up, rips through the high,
and then sellers pull it back down. And
then at the open, it rips up. Is it
going to reverse? No, it goes a little
higher, and then it drops back down. And
now it's kind of, you know, softening.
So, the issue here is that every time it
comes up against resistance, you've just
got a wall of selling because it is easy
to borrow. There's lots of shares out
there. Even though it's only a 1.8
million share float,
they've
market makers or clearing firms have
determined that this is okay to borrow.
So,
that typically
to me, when I see it's easy to borrow, I
put sort of imaginary guardrails on how
much the stock can go up. Because
typically shorts are going to hold it
back. Now, there are exceptions to that.
Is this one going to be the one? I'm not
really sure. Yesterday was actually a
pretty strong day. We had FTFT at the
open that squeezed up, and as the day
went on, the thing kept going higher.
So, FTFT was really strong yesterday,
and I think that probably ignited a
little bit of FOMO in the market for
some type of pop at the open today. I
didn't expect it to be VEEA or VEEA
though. Because here's the thing with
FTFT yesterday.
Pre-market it had a total
of, let's see, I'm going to grab the
chart. So, it had total of about uh
before that candle, it was about 4.7
million shares of volume during the
pre-market session. And it was only up
like 6%. It wasn't up that much. And
then the bell rings, and it surges. So,
when I looked at VEEA, and I saw that,
well, during the pre-market session
going into the open,
we already had in excess of 30 million
shares of volume, I felt like,
you know, I just don't know if this
thing's really going to pull away. I'm I
think it's going to be too crowded. As I
was looking at the level two, it was
very thickly traded, big stacks of
buyers, but also matched by equally big
stacks of sellers. And the result is
that when you have a stock that's that
thickly traded, they don't usually open
up. They don't move very quickly. So, I
did not trade VEEA. In fact, I did not
take any trades today in either my big
account or my small account. I just
didn't Well, so I'll talk about the
small account in a second. But on VEEA,
I just didn't feel confident. You could
see right now, it actually is not as
thickly traded as it was earlier. And
that speaks to a bit of a phenomenon
that we see at the open, where stocks go
from very thick in the pre-market to a
little thinner because of market makers
taking advantage of stop orders and
market orders. But SUGP, see how thickly
traded this is? Big stack of buyers, big
stack of sellers. For this to even go up
15 cents would be I mean, it would be
huge.
It's got 90 million shares of volume,
and it's just going sideways. Well,
that's the same as how F Sorry, VEEA
looked this morning. It was very thickly
traded. Now, it's thinned out a little
bit here at the open.
Uh but unfortunately, not enough for me
to feel confident trading. VT FTFT, this
one's
not moving quite as much. It's only got
4 and 1/2 million shares of volume. But
traders were kind of looking at that one
this morning as well, and I thought, you
know, why?
Because it made a big move yesterday.
Well, but isn't it clear that this is
sort of a the backside of this move,
right? I mean, it'd be very uncommon for
this to go all the way back up to here
and push higher. Even in a hot market,
that's pretty uncommon. And we're not in
a hot market. Yesterday was warm, and
today feels a little cooler. And that's
typical. Sort of warm, cold, warm, cold,
warm, cold. Maybe two cold days and a
warm day, three cold days and a warm
day, then maybe two warm days in a row,
then a only sort of cold day, and then
four warm days in a row, and then we
start to see that shift. But right now,
it's still a bit on the colder side. So,
I decided FTFT, no interest in that.
VEEA, didn't feel like it was worth it.
SUGP, however, now this one I felt
differently about.
Once this broke over a dollar right
here, I punched it. I said, "You know
what, small account, I'm going to punch
it, and let's take a look at what
happened."
Boom. Order rejected. Why? So, your
limit is significantly higher or lower
than the last traded price. Confirm
you're trading the correct security.
I had a 15 cent offset, which meant my
limit it was the current price was about
a dollar and four cents, and my limit
was for 15 cents above that. So, a
dollar five plus 15 is a dollar 20. If
you put an order more than 10% above the
current market price, they automatically
reject it and tell you to double-check
it. Now, I did intend to send the order
at that with that offset, but it got
rejected, and that's because of the hot
key setting I've used, which is a 15
cent offset. So, I ended up missing that
trade, and as you can see right here, it
broke a dollar and went all the way up
to a dollar 20. Now, I wouldn't have
wanted to get in at a dollar 20. I
suppose if we're going to be honest,
that offset was a little too high, but
that's just what I've had hard-coded for
my uh hot keys.
For a stock like VEA, 15 cents is no
problem. Again, not that I really wanted
to get the full 15 cents of slippage,
but if something's moving quickly, I you
know, that's just what I've historically
allowed it to fill me at, and I it's
been okay. So, unfortunately today, that
one trade didn't end up working uh for
that sort of silly reason, and then
after that, it got very thickly traded.
My thought was that maybe this thing
breaks a dollar 25 and squeezes up to a
dollar 50, but it didn't do that, and so
then I said, "No, I I'll now I'm not
interested in it." So, SUGP is our
second leading gainer, very thickly
traded, no more interest in that. MYSZ,
18 million shares of volume, moved after
hours, continued at 4:00 a.m., and then
sells off.
Uh we had a couple other stocks that
popped up. We had uh just after the top
of the hour, CSAI. This one had news at
9:00 a.m. but interestingly, it didn't
pop until 9:15. So, that was a little
strange, not sure why.
Um there were a couple other stocks, B
BNRX, I think, or BRNX.
Um this is a energy Israeli energy
stock. So, popped up for a second, sold
off. They had a headline here, uh but it
seems like it's a it's some type of
settlement with a bank, so wasn't really
sure what that all meant.
Uh and so, you know, at the end of the
day, end of the morning here,
I just didn't see anything I liked. ERNA
pop, reverse, news, no, you know, no
good, not sure. So, unfortunately, today
was a bit of a miss, but
uh you know, that at least for the
pre-market session, but look, I'm okay
with that. I just got to be patient. You
know, yesterday was a good day in the
small account.
Uh
you know, and I just got to show up
every day because you never know when
you're going to have another good
opportunity. So, so let me remind you
guys, as always, my results are not
typical, trading is risky, and please
practice in a simulator before putting
real money on the line, and I'll see you
guys back at it streaming at 7:00 a.m.
tomorrow morning.