Wall Street Hedge Funds Vs GameStop

Game Stop

by Ray Merriman, courtesy of MMA Cycles

Last week, a surge of trading volume in shares of GameStop, AMC Entertainment, Bed Bath & Beyond and BlackBerry, surprised Wall Street firms that were betting on those stocks falling. The share prices spiked instead as the online Reddit forum WallStreetBets encouraged individuals to invest. Platforms like Robinhood and Interactive Brokers limited trading on certain stocks in response and Robinhood, billing itself as a democratizing force in the market, took criticism.

This rare stock market event is a classic correlation with the current Saturn square Uranus transit, as the volatile, unpredictable Uranus in Taurus (the stock market) stormed the gates of the establishment’s (Saturn) Wall Street professional hedgers, causing unimaginable and exaggerated price movements (Jupiter in the mix) in heavily shorted stocks. And the gate-stormers were winning! Well, they were winning until the rules (Saturn) were suddenly changed (Uranus) and the newbies (Uranus) were restricted from trading in these companies. So much for the concept of “free markets.” Intervention (a Plutonian dynamic) took over as Venus (money) was also conjunct with Pluto (liquidation and intervention).

I can’t really be critical of Robinhood, can I? After all, that’s where the namesake of my surname comes from. The merry men (my last name is Merriman) were originally “Archers in the service of the King.” Now I spend my hours zeroing in on hitting the bullseye of highs and lows in financial markets. Apparently, so are many of my fellow archers from incarnations long ago. I wish them well as they seek the crown jewels of professional hedgers (short-sellers), who are like the “king’s men,” very upset with the upstart merry men trading on the Robinhood platform. Think “stealing from the rich to feed the poor.” Those who control the wealth and make the rules of the game don’t seem to like that.

But, alas, this was not really in the spirit of Robin Hood and his merry men of that mythic tale. This was more like Robinhood and scaredy-cats imposing restrictions on the new breed of young traders who were upending the status quo of the hedge fund establishment. This current Robinhood ran from the king’ s men just as the “money heist” was getting underway by the new breed of suddenly rich and daring young speculators. The trading site Robinhood runs ads that tout “investing made easy.” Suddenly, investing became risky and dangerous, but it was also a road to quick riches if you were able to act nimbly and fast enough. That is, before this version of Robinhood pulled the plug and stopped all those new traders from taking their profits and bidding the companies even higher. But all this added up to huge losses for all the king’s men (the short-selling hedgers who bet against a company’s success).

But back to the case of Jupiter and Saturn square Uranus: nothing goes as planned, and there will be plenty of surprises in store for everyone this year – especially those who set themselves up as “kings” or “king’s men” (self-imposed or appointed regulators), or those who act like dictators or authoritarians (the low side of Saturn, especially with Pluto in Capricorn). This reflects Uranus (revolt, breaking the rules and customs) in dialogue with Saturn (the rules and authority) in 2021. And it’s only the end of January.

Uranus’ volatility was in full view in global equity markets last week – a week where nothing went quite as expected. The assault on short-sellers by Robinhood traders freaked out the markets and led to Wednesday’s global stock market rout. When the new rules to restrict trading were imposed, the markets recovered smartly for half of a day (Thursday), but then the selloff resumed due to the sudden and unexpected uncertainty. The Dow Jones Industrial Average, for example, was down over 600 points on Wednesday. On Thursday it was up over 600 points. Then another sell-off started and by Friday it was down another 600+ points again. This was not a good end to the week for any stock market, let alone a week when a few started off by making new all-time or multi-year highs. It is beginning to look like January-February of 2020. But the volatility then was caused by a pandemic. Some kind of group-think seems to be the cause this time. Both the sign of Aquarius and the planet Uranus can correlate with group-think and frenzies.

The NASDAQ and S&P had just made new all-time highs before Wednesday’s selloff began (but not the DJIA). As I pointed out in a recent MMA Cycles newsletter, “The danger of a change in investor psychology is very strong during this period, and hence traders will need to be very careful. This can be a very erratic and volatile market with large price swings in very short periods of time… The tension suggested for this week is further augmented by the Leo full Moon on January 28, the same period when the Sun will conjoin Jupiter, and Venus will conjoin Pluto. With Jupiter being the planet of exaggeration, still in a hard aspect with Uranus, one can see why there might be very large price moves nearby.” In case you hadn’t noticed, there was a correlation between cycles in the cosmos and cycles in human activity last week, and it showed up in financial markets.

This post was shared with permission from the author. Get access to the MMA Cycles free weekly email newsletter at https://www.mmacycles.com/

Image credit: Keith C, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons

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