Okay folks, so we've got a lot to discuss and it's going to be quite violent. Number One: I want to give an update on the state of the market why: You are starting to see some of the highest flying stocks? some of the best growth companies from earlier in the year start flying again Out of nowhere. Will the shift continue and my projections on the reasoning behind it? Number two: you already know that Bitcoin hitting you highs what is going on? We're going to discuss that, which was crazy because just a couple months ago we were hearing that this was gonna go to zero and then it would never come back. Maybe selling on every bad headline isn't the best strategy? I don't know.

And then, lastly, number three, we're going to be discussing what the Sec's report on Gamestop, Amc, and other meme trades from earlier this year reveals. After many months of deep investigational work and oodles of taxpayer dollars, they've come to some very, very eye-opening conclusions. For example, they found that when brokerage firms suddenly suspend trading, investors may lose money. I think they may just have a Sherlock Holmes on their team.

who would have thought that restricting trading on the buy side would result in lowering prices? I I could not have thought of that myself. At one point, they even complained about the cost of borrows limiting the amount of short sellers that were able to short a lot of the meme stocks back in January. But there is at least one massive positive thing that came out of this report and we'll talk about that and before we get into it, the only thing that I ask of you in return for all of this is that you hit that ravage and like button And also don't forget to subscribe either. Okay folks, and before we get into it, I want to go ahead and thank today's sponsor, Ziptrader.

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You'll get a free stock up to 70 dollars when you sign up using said link. If you do join, make sure to follow me at Ziptrader on the app. Okay, let's go ahead and start more green everywhere. S P down Nasdaq Rolski's Arc outperforming again as growth has been lifted, big and small tech companies are reporting very, very strong beats on earnings and we're seeing some consistent inflows into almost every sector of the market right now that we haven't seen to a large extent since basically January, you're seeing growth companies that have solid business models being rewarded more and more.

You're seeing even peak fear sectors like China seeing a lot of inflows. Now I understand that a lot of people are speculating on a huge year-end rally, but I'm not that easily convinced. I think right now it's too early to call a trend change, but I would not be surprised to see some broadening out of capital flowing into a lot of the high-flying names from earlier this year that are just beat down way way too low, and capital flowing back into companies that are showing actual results and have a proof of concept and a really innovative business strategy like I don't know, Chargepoint, Lucid, or Palantir. Capital flowing back into those would be a very, very welcome site this year.

If you found a company that you really liked and you liked their business model, it wasn't going to see much capital flow into it because of a lot of the fud in the market. The capital just has been very very risk-off all year. But now you're starting to see a lot of people say hey, wait a second. All of these are really, really cheap.

One of the things that caused the growth sector to explode dramatically in Q4 of 2020, and Q1 or early Q1 of 2021 was quite frankly, hedge funds getting over leveraged into them trying to ride the sentiment. They knew there was a general rotation and sentiment in that direction. So what did they do? They leveraged the hell out of their positions. They made tons and tons of money, Growth stocks went flying, everything was flying.

And then what happened? Well, bond yields started going up. You had some flip dramatically into the downtrend short selling, others got margin, called on their longs, only to then go and aggressively switch to shorting, and a couple months later, almost everything in Growth Tech was dramatically down. Leverage has the ability to bring something up much much faster than it should naturally, but it also has the ability to bring it down much, much more than it should naturally, and with sentiment shifting. A lot of people are making the projection that hey, they're going to start piling on the reverse direction, going and buying a lot of these same stocks.

Now, I'm not making that argument. I don't think that the market condition is such that they're going to do that. I don't think with tapering on the horizon and supply chain shortages that they're going to go on and be fully euphoric like they were last year. However, in a market condition where you start seeing more broadening out, what are they Going to be doing? they're going to be starting to reduce their shorted positions on a lot of growth stocks.

We've already seen how fast hedge funds can change their mind with the cryptocurrency market. You saw so much shorting just like six months ago and now there's so much money going back and leveraging it up to new heights. Okay, speak of the devil, Bitcoin hitting new highs Finally, largely sparked by Bitcoin becoming more investable and more accessible and more institutionally adopted and mainstream accepted. That being said on a practical measure.

I mean, I'm not super excited about this Bitcoin Etf other than the symbolic value of it. Quite frankly, if you want to invest in Bitcoin over the long run, just buy Bitcoin. I don't know why people feel more comforted buying a Bitcoin futures Etf, then they would just bind straight up Bitcoin. But here's what the Etf, manufacturers or makers said: Bitto will open up exposure to Bitcoin to a large segment of investors who have a brokerage account and are comfortable buying stocks and Etfs but do not desire to go through the hassle and learning curve of establishing another account with a cryptocurrency provider.

Real tough to sign up with a crypto broker these days. I mean, sometimes you have to make a username and a password And don't get me started on the Captcha. They say click the pictures with the tree and I'm like, well, how do you define tree exactly because this could be a big plant or it could be a tree. I'm not really sure it goes on or are concerned that these providers may be unregulated and subject to security risks.

Okay, that's a bit more fair, but with all the massive platforms out there building out a long track record and reputation, this is becoming less and less true, especially considering there's a lot of mainstream stock platforms that are now offering crypto trading. I've also enjoyed watching the media's coverage on Bitcoin. I don't mean to single out Jim Cramer, but he does kind of represent the corporate establishment and their vocal point and viewpoint on cryptocurrency. When Bitcoin was in the low authorities, he said he was selling, citing Chinese crackdowns and other reasons, he said it would not come back up again back in September as it was coming back rapidly.

He urged people to take profit citing Evergrand, and then he started flipping a bit back in October as it rallied into the 50s. Now that we were at like double the price that he sold out at, he's once again projecting it to top out. Now you're allowed to be wrong. And again, I don't mean to single him out.

I want to be professional. I understand he's a little bit controversial in the niche, but what's frustrating is that so many retail traders get flooded out of great positions in great asset classes that they believe in because once something's going down, the media will relentlessly harp on negative catalysts, making sure that you feel that you need to sell it. and more importantly, click their article. Then when they start recovering what happens while they start projecting euphoria.

Oh, all these things don't matter anymore. The main thing is the bull thesis. It just creates this really frustrating cycle where retail is going to be panic buying at every high and panic selling at every low, which again, is the opposite of what you want to do. If you don't believe in Bitcoin during its downtrends, then you don't deserve to believe in it during its uptrends.

Have to yourself, create that inner conviction and build a bulletproof vest that says hey, whatever the media throws at me, I don't care. It's like getting into a relationship and expecting only good days. And the minute that Jim Cramer says your girlfriend or your boyfriend smells, you're like we're over. Okay, Lastly, you've probably heard about this Sec report that came out yesterday and you probably already know a decent amount about it.

But let me just talk about the main points and just some of my responses. Number One and what the media has loved to report on today was they found that the main driver of Gamestop stock rise in January was retail buying it, not short covering. Of course. that's kind of missing the point because people weren't buying it because it was squeezing.

People were buying it anticipating the squeeze. If enough people bought it, you know that's that's kind of how it works. People see a stock with really, really high short interest and they're like, okay, well, if everybody starts buying it individually, then this could be an interesting play. But when those same retail traders are blocked from actually buying those same stocks, it stops them from being able to execute their free roll and free will in a fair marketplace.

If buyers had been freely able to rally this up as much as they had wanted to in a fair market, then perhaps Shorts would have started covering at a little bit higher valuations. Who knows? The Sec said themselves that a small fraction of shorts were already covering. So what if this had gone on to run even more, You'd start squeezing out the weaker and weaker shorts, and eventually you get to the stronger ones. And what is frustrating here is that the Sec didn't make any effort to propose any fixes to stop retail traders from losing the buy button again in the future, stating that some brokers actually reserve the right to decline customer orders or cancel trades without prior notice.

Yes, they have those clauses in most brokerage agreements. A broker would be stupid not to put them in the agreement, but shouldn't there be a certain level to what's reasonable and what's not? At one point, they blamed Gamestop's rally in part based on the high cost of short selling, which discouraged short sellers from shorting it more. They said staff have observed that it was unusually costly to borrow shares in Gme. Academic research implicates constraints on short selling as a possible contributor to bubbles where stock prices rise above what may be justified by fundamentals.

Such constraints on short selling could arise from cost or from risk aversion. To the extent that Gamestop was costly and risky to short, the reluctance to short sell could have contributed to the run up in prices and subsequent steep decline. Cost to short sell was just too damn high for short sellers. As short sellers, we are protesting for rent control.

We want fair rent for fair prices on our borrowers. That way we can have more of an efficient market for our profit margins. I mean, to advocate for short selling costs in this report is the most ridiculous thing that I've seen, but honestly, overall, we didn't learn much from these investigations. I also talked about the gamification of trading, which we've heard from them before.

They're upset that certain brokerage platforms seem to want to make you trade even more, which obviously would benefit their bottom lines. Honestly though, I'm pretty indifferent to that. I think that a broker can shoot all the confetti they want at me when I place a trade, as long as they're actually allowing me to place a trade now. Criticism aside, there are some positive points They proposed: improved reporting of short sales.

We do need a lot more transparency. They acknowledge issues with payment for order flow, creating some inverse incentives in a lot of cases. But the only positive home run that I would say with this report if you could even call it that is their acknowledgement of the Bs that goes on with dark pools and off exchange reporting. They said much of the retail order flow in Gme was purchased by wholesalers and executed off exchange.

Such trading interest is less visible to the wider market, and payments to broker dealers may raise questions about the execution quality investors receive. Though wholesalers increasingly handle individual investor order flow, they face fewer requirements concerning their operational transparency and resiliency as compared to exchanges or Ats translation. The lack of transparency and overrouting to a lot of these off exchanges raise serious questions as to whether retail traders are getting the best execution. So they also talked about how Gme back in January was 88 internalized dollar volume and Citadel Securities accounted for nearly 50 percent of that.

Which means by their own language, retail traders likely weren't getting the best deal. Which means they also aren't getting the best deal today. So the Tldrs: I don't think that this report was necessarily wrong, although it focused on a lot of wrong areas at times. I just think that it didn't go nearly as far as it should have if it was searching for buried treasure that was 10 feet down, it went about a foot.

I hope that we see more investigations into predatory practices and that we see more revelations coming to light and that overall we get more transparency. Anyways, folks, that's it for today. If you have any questions, feel free to reach out to us below or join us on zip Trader Circle. Also, if you're wondering what broker to trade these stocks on, well, we like to send new traders over to Public.com Ziptrader and I'll go ahead and put the link below.

You'll get a free stock valued up to 70 when you use that link. Anyways, have a good one and I'll see you in the next video.