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The last two weeks haven't exactly been ideal for the major US indices. Since the end of August, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 have been down 1.54%, 0.93%, and 0.51%, respectively. The decline in these indices is all the more striking as they have followed an impressive run of record highs and seemingly inexhaustible market bullishness.

In times like these, perhaps it is good to remind ourselves how far the indices have come in the year to date. If anything, reminiscing about the indices extraordinary gains in 2021 should help us contextualise the minor misfortune befalling stocks and indices in September.

It may also be appropriate to remember that September has never been a great time for stocks. One example frequently quoted is that Since 1945, the S&P 500 has closed lower 55% of the time during September. More recent history has been kinder to the index, recording a 25% loss rate in four September since 2016.

It may be too soon to call September 2021 for the bears. There is still time for the market to turn things around. As we ride out the rest of the month, let's revisit some of the most significant share price gainers of US-listed companies thus far in the year. Bear in mind; some stock price gains may be the result of steep losses the year before or other anomalies in the market.

Largest Gainers: Past Week

aTyr Pharma (NASDAQ: LIFE)

aTyr Pharma shares have risen 60.8% in the past week after it reported positive results in a trial of its lung disease (pulmonary sarcoidosis) medication. The Californian based Biotherapeutics Company share price rise is even more impressive from the vantage of a month, up by 81.7% in this time frame.

Notable mentions; Uranium Energy (NYSEAMERICAN: UEC) up by 26.6%, Aloca (NYSE: AA) up by 13.0%,  First Solar (NASDAQ: FSLR) up by 9.7%.

Largest Gainers: Past Three Months

Peabody Energy (NYSE: BTU)

ESG investors will be disheartened to hear the Largest Gainer for the past 90 days has been Peabody Energy Corp. Peabody Energy is a 'coal producer', one of the largest in the world at that, with mining operations across the US and Australia. The Company has contracts to supply Coal to electricity generators, and steel manufactures around the globe.

Since August, the price of Coal has soared due to limited supply and improving demand from developing Asian nations. These factors led to improved finances for the Company, resulting in BTU rising by 83.6% since mid-June.

For interest sake, Coal is currently trading at $177.5 per metric ton, up from $40.40 per metric ton at the end of August.

Notable mentions: Chipotle Mexican Grill (NYSE: CMG) up by 37.6%, Advanced Micro Devices (NASDAQ: AMD) up by 29.9%, and Nvidia (NASDAQ: NVDA) up by 25.3%.

Largest Gainers: Year To Date (YTD)

AMC Entertainment (NYSE: AMC)

Perhaps this was an obvious choice for Largest Gainers since February 4 (the first trading day of 2021). AMC, up by 2,200%, after catching a second meme-stock wind. Its popularity as a short squeeze stock has risen to be perhaps equal to that of GameStop (NYSE: GME). It is arguably so because it is "cheaper" per stock and owning one whole AMC stock feels more satisfying than owning one-fourth of a GME.

Speaking of which, the only stock that could give AMC a run for its money is GameStop. Up by ~1,000%) YTD, GME has battled its way up to from US $17.25 to, as of writing, US $204.5 per share.

Notable mentions: Veritiv (NYSE: VRTV) up by 329.1%, Dillard (NYSE: DDS) up by 250.5%, Macy's (NYSE: M) up by 89.9%.

At the close of the US markets on Wednesday, AMC Entertainment Holdings Inc (NYSE: AMC) was trading at US$ 62.55, up by 95%. In after-hours, another 5%+ gain is likely.

The growth in AMC's price began in earnest last week, with the price rising from US$12.38 to US$26.12. This week has been just as intense, with the previous two day's booking noteworthy rises of 17% and the 95% mentioned above.

GameStop Corp (NYSE: GME) also experienced a considerable jump in price over the same time frame, up by 56.5%. As of Wednesday closing, the original meme stock was trading at US$282.24.

What's driving the AMC price spurt?

While on its way to pre-pandemic patronage, the world largest Cinema company is undoubtedly not inspiring investors purely with its fundamentals. Rather, I suspect that investors are inspired by the recent media reports detailing the phenomenal losses that short sellers are continually racking up.

On 26 and 27 May, it was reported that GME and AMC short sellers lost $618 million and US$754 million on respective days, as the meme stocks rallied. Last week alone, AMC short sellers lost US$1.2 billion. These numbers are incredibly intoxicating for short squeezers.

Short Sellers losing hundreds of millions after AMC stock rally!

short sellers

Is it just me, or is there more mainstream reporting of the short sellers' daily losses more frequently?

While I believe there is an uptick, I don't think these reports were the initial catalyst of the current run-up in price seen in GME and AMC. However, I believe it is spurring meme investors to increase their positions in the stocks and push past the 'natural' short squeeze price of the stocks.

If what short squeezers believe will eventuate in the mother of all short squeezes (MOASS), the extra price paid for each stock right now will be immaterial to them. Likewise, if short squeezers can inflict a little more pain on hedge funds along the way, then the cost incurred for another turn of the screw appears to be entirely worth it.

Please note, BlackBull Markets do not offer the option to trade AMC or GME. However, we do offer exposure to the major US indices and stocks such as APPL, TSLA, MSFT, etc.

It has been an interesting couple of weeks on wall street. Inflation fears cropped up every second day, while the Fed intimated that raising interest rates is back on the table. Meanwhile, several big-box retailers beat their earnings expectations, and US manufacturing reportedly sprung back to life at a record pace. To top it all off, the US Dollar lost ground to its trading partners.

All the above factors have meant that the US indices have been see-sawing every other day.

How closely does GME follow the movement of the market?

At this point in the GameStop short squeeze, which has (admirably) been ongoing for months now, I would expect very little correlation between GME and the market at large.

GME is a beast all of its own, with market forces beyond the general day-to-day pettiness of the major US indices. People trading GameStop stock are not interested in inflationary pressure in the US. They are not interested in commodity prices. They are not interested in when The Fed begins tapering off its stimulus.

What are GME investors interested in?

They are interested in the camaraderie and taking advantage of a significant oversight on behalf of hedge funds. Above all, they are interested in sticking it to the man and making money from those who have bet against a perfectly fine horse. Is GameStop worth its current market cap? Not at all. Is it a viable business? Most definitely now that it has paid off all of its debt and raised more than half a billion to facilitate its transition into a primarily digital business. However, its valuation is still mostly based on investor’s hope for the squeeze, more so than the Company’s fundamentals.

How closely is GME correlated to the S&P

co-effecient

To make things easy, let us look at the correlation coefficient between GME and the S&P over the past month and compare it to a time in 2020 before the big squeeze began. A value of 1 would indicate that GME and the S&P are highly in sync, while 0 is not so much. A negative value would indicate a negative correlation.

GME has indeed uncoupled further from regular market forces and appears to be in a league of its own. As the above image illustrates, the correlation between GME and the S&P has shrunk. Last year, a moderate correlation of 0.57 existed. Since this time, the correlation has shrunk to 0.19, based on the previous month of data. Such a low figure indicates a very weak correlation.

Is GME a good hedge against a market downturn?

It will be interesting to see what happens to GME’s price during more extreme market events. Can diamond hands withstand a complete market downturn or a repeat of the 2008 GFC? I guess it would depend on GME’s status as a hedge against a market crash.

Could GME be the new Gold?

Purely based on GME investor’s current motivations, I don’t see why GME couldn’t act as somewhat of a hedge against a broader downturn. The incentives of GMEs investors are aligned elsewhere. Some may sell their lottery ticket to pay for food, etc., but I would expect it to be one of their last investments sacrificed. In this way, GME and its meme coin brethren could be the new Gold and value stocks.

Please note: BlackBull Markets does not offer the option to trade in GME. What we do offer are forex, commodities, indices and a number of major US stocks.

The Mother Of All Short Squeezes, or MOASS for short, is how the impending once-in-a-lifetime squeeze of GameStop Corp shorts is being referred. And rightfully so. Everything surrounding this event is historical, and whatever eventual short squeeze prize eventuates, whether shares are selling at $1,000 or $1 million, it will not negate the importance of the event. It will still be the MOASS, a blueprint moving forward, and a necessary counter for imprudent short positions.

If, or when, the MOASS occurs, and the proof of concept is validated, I predict that we will immediately see short squeeze attempts on other heavily shorted stocks.

Attempts were made in the past to squeeze the shorts on other heavily shorted stocks. But these felt like half-hearted attempts and too early a distraction from the GameStop Squeeze, which had not worked itself to a solid conclusion.

In the heat of the February squeeze frenzy, AMC Entertainment Holdings Inc, Koss Corporation, BlackBerry Ltd, spiked by 300%, 1,800%, and 240%, respectively, before incurring significant drops. The periphery squeezes have all lost significant interest since those heady days at the beginning of the year. Four months later, nothing has been able to match the stamina maintained by GameStop squeezers. There has, of course, been fluctuations in the GME price, but a strong pool of squeezers has always remained, diamond-handed as they say.

It would not be too controversial to speculate that if the MOASS comes to fruition, money will immediately begin flowing into other heavily shorted stocks. Veteran and virgin squeezers will want to recreate the success of the MOASS and squeeze more from short sellers across a range of other stocks.

I will be keeping an eye on AMC, KOSS, and BB as the potential first responders to the MOASS. But squeezers might also turn their collective interest toward Nokia Oyj, Bed Bath & Beyond Inc, and Discovery Inc.

But for now, all eyes are on GameStop. The concept will have to be proven over there before interest creeps into other heavily shorted stock.

GameStop MOASS

Just make Ryan Cohen GameStop CEO Already

An impressive list of executive superstars has joined the C-suite roster of GameStop (NYSE:GME). The new appointments should help build confidence in the Company as it pivots to a digitally-driven business.

The news was welcomed by the r/wallstreetbets community on Reddit, who have been eagerly awaiting a C-Suite shakeup.

Ryan Cohen for CEO

r/wallstreetbets is predicting Ryan Cohen to take the CEO position

In the lead-up to GameStop's earnings report last week, online speculation was rife that activist Board member Ryan Cohen would be ascending to the CEO's role. The hope was that Cohen would then implement sweeping and radical changes.

One radical change postulated was that Cohen could implement a 10x share split. The rationale behind this move would be to lower each share's price to allow poorer retail investors to participate in purchasing GameStop stock. The theory being this is that demand would lift, and with it, the price. None of the online speculations eventuated in what might have been the most watch earnings call in history. The stock price plummeted the next day, but it has since regained its pre-earnings call level.

GME closed at US$189.82 at the end of the US Wednesday trading, down 2.39%. It appears investors have been playing a waiting game for the past couple of weeks. Uncertainty in the price is possibly waning, and a return to the stable daily movements shown from Feb 8 to 24 might be seen moving forward.

gme stock price

The new kids on the Board

Cohen, the former CEO and founder of Chewy.com, has publicly expressed his dissatisfaction with the current GameStop Board and has a lot of sway within the Company and investors. He holds 12.9% of the total float of GME and is heading the Company's strategic review.

Last week, a total of eight Board members gave notice that they would be exiting the Company in June. Cohen wasted no time in replacing them, and Wednesday saw a spat of new announcements.

The biggest catch for GameStop is Elliot Wilke, a former executive at Amazon. At GameStop, Wilke will be taking up the role of Chief Growth Officer, an essential office for driving the brand's transformation.

Two former high-performing Chewy.com executives are also set to join the GameStop Board, replacing those exiting. Andrea Wolfe and Tom Petersen are taking up vice president positions in brand development and merchandising, respectively.

With the C-suite shakeup, instigated at the behest of Cohen, it is not so farfetched to speculate that the Board is priming to announce Cohen as CEO in the very near future. Whether he will instigate any of the radical changes bandied about online is up for further speculation.

Yeah the FOMC kept rates as is…But have you seen GameStop?

While the world continues to grapple with the Coronavirus, the financial markets are captivated by the financial phenomena that are GameStop. Currently, the stock price sits at $255, but by the time this is posted, the price will likely be plus or minus $50. Lawsuits have been served to Robinhood in New York and Chicago due to the low-cost brokerage withholding the ability to purchase more stocks of GME. Sources have stated that Robinhood is currently drawing millions from credit lines from Goldman Sachs and JP Morgan Chase.

"What is GameStops's Price now?" - Yes.

It is incredible how captivated the financial community and even main street on what is currently happening with GameStop. Yesterday, we had the titans on the equity markets releasing earnings. Apple, and Tesla. We also had the FOMC releasing their interest rate decision, alongside Federal Reserve Chairman Jerome Powell releasing his views on the economy, but everyone was too focused on GameStop.

What you missed - Federal Reserve Keeps Rates Unchanged

The Federal Reserve keeps rates unchanged as Jerome Powell believes that "its going to be a struggle "the pandemic still provides considerable downside risks." The Federal Reserve continues to show its unwavering support for the US, introducing a new bond purchase program worth $120 Billion a month and will continue to do so every month until 2% inflation is reached and lower unemployment is reached.

Apple breaks the $100B per Quarter mark

Apple released their highest revenue figure in the company's history, reporting $111.4 Billion, in which $65.6 billion came from iPhone sales. This was higher than the $59.8 billion analysts expected. Dan Ives praised Apple, stating that "this [was] a masterpiece quarter" for Apple.

Tesla was a mixed bag

Tesla missed earnings for the first time in 10 months. However, it wasn't all bad news, as their quarterly sales were better than expected. They have over 10 Billion in cash through the issuance of Tesla stock. Shares weakened slightly; however they rebounded today.

Be ready for more GameStop in your news feed. However, do not forget about the technical and fundamentals regarding specific currency pairs you are following.

(GME's price at closing was at 190. After hours? $350.)

Can't stop, won't stop, GameStop

In the early 1600s, Tulips first arrived on the shores of Holland from Turkey. The flower was exotic, beautiful, and nothing like any other flower that grew in Holland at the time.

You're probably looking at around $30-50 Million worth of Tulips (in 1637)

Tulips and Gamestop

Like Turmeric was to the UK before exploring India, Tulips became an extremely exclusive and highly luxurious status symbol. It was stated that "it was deemed a proof of bad taste in any man of fortune to be without a collection of tulips." Tulips became a thing to have to "keep up with the Joneses" at the time. Therefore the middle class started to collect tulips to portray this image of wealth.

This demand and love for tulips inflated the cost of tulips bulbs, with the rarest tulip bulbs in the year 1636 going for $750,000 in today's money. However, many Tulips ranged from $50,000 - $100,000. At this point, Mania ensured. Individuals who held extremely rare Tulip Bulbs saw their assets increase in value just by having it. People believe the stock price could never go down and that "the passion for tulips would last forever."

Individuals started buying tulips on leverage and began to use derivatives in hopes that they would profit from borrowed money. However, as confidence started to waver, Tulip owners started offloading as fast as possible. This meant people with derivatives were selling at a lower price they bought it at, desperately trying to offload so they could pay their creditors. By 1638, Tulip Bulb prices returned back to normal.

Gamestop with a 1,800% Rally - in 28 days

Does this sound like a familiar story? GameStop, an American video game retailer, traded below $6 for most of 2020. It currently sits at $347. Is this the Tulip Mania all over again? Not quite.

Can't Stop, Won't Stop, GameStop

The context of how we came about to a company that had a short float of over 80%, reversing to generating 1,800% in 30 days, is a convoluted one. Long story short, a Reddit community of retail traders on the subreddit called WallStreetBets thought of a simple but genius way of pumping up the price on stocks relatively cheaply: Induce a short squeeze.

Original GameStop Bull making over $22 Million on $12 strike price calls expiring Jan 2021

With over 80% of Gamestop's stock short, the WallStreetbets community decided to purchase near-dated call options to induce a short squeeze while continuing to buy more call options, pushing the price higher and higher. This is akin to what Jordan Belford did in the Wolf of Wall Street and deceiving investors. However, the difference is that this time, not one person can be put to blame. Plus, its not illegal to speculate. It's like a social pumping and dumping scheme using options – without the dumping. The question arises, why?

GameStop Phenomena is just funny

I believe I am young enough to understand why this is happening and understand why older, more seasoned institutional investors don't. The reasoning also shows why it's quite different from Tulip Mania.

The unique concoction of cheap access to the equity and derivative markets, combined with lockdowns & stimulus checks and the rise of social media boards such as Reddit, has fueled young, money hungry, and humored retailed traders to enter into these risky trades because it's merely funny. No fundamental analysis is involved, just fun.

That's the difference between the Tulip Mania and Gamestop Mania – Tulip investors were doing it for the prestige, with the benefit of wealth. However, with Gamestop? The Redditors are doing it because it's humorous – it's funny to them buying a near-broke stock and pumping it up, even if they lose all their money. It is almost like the capital they inject into the market is the cost of entertainment.

There is no doubt a lot of the retail traders investing in Gamestop will lose money. However, that's the fun of it.

My brother was caught in the GameStop Mania – I woke up early for work this morning and saw him wide awake on his trading account buying these heavily shorted stocks "at times where me and my friend thought it was the funniest."

GameStop Phenomena isn't going to stop at GameStop

Will we see more of this in the future? Probably. Will people continue to lose money? Most likely. Will some people make a lot of money? Of course. Is this the financial world we live in? Yeah, it is.

I believe that investing should be accessible to everyone and anyone willing to put their money to work. Many people share this idea. That's why low-cost brokerage started to become popular. However, the bi-product of this is that phenomena like this eventually occur when retail traders throw away any fundamental analysis and game the system that large and rich institutions help create. This phenomenon is the antithesis of "Markets can stay irrational longer than you can stay liquid," however, this time, the market is a bunch of retail traders, and the "you" are the large, fundamentally drive hedge funds that are short.

With that said, Fundamental analysis will slowly come back into play. The Markets will gradually become rational again – the retail traders' confidence will waver, and derivatives will slowly come due. Prices will once again come crashing down as they did with Tulips in 1638. That's where the comparisons continue with the Tulip mania and this GameStop mania.

However, Tulips were only one exotic flower that the citizens of Holland could get their hands on.

There are many stocks out there. The question isn't when is GameStop going to crash – the question is, What stock is next?