They are really sucking the blood out of the market this week, huh? folks. The heat map of the S P 500 looks like a blood drive. Imagine if somebody made a market and it actually went up. But in this video, I want to violently break down a couple different setups that you need to know about going into next week and you're going to want to reflect on over this weekend, including specifically our beautiful Redbox play, which managed to break into a new cycle high today having a casually elegant 70 plus run today.

What do you need to know about it before next week? The setup is pretty damn extreme. Is there more upside or is it all downside from here and how should you play it? And before we get into the content, I do want to remind you that our zip trader you never give up coupon code will be expiring tomorrow night. Okay, I want to start by discussing all Gator Madame Attergator put up quite the fight this week. You saw some huge momentum early on and that got doused with the overall market volatility, but it fought hard for the fives and for the most part earned its way into holding that crucial battleground vortex is estimating its short interest to still be at just around all-time highs, which is always funny to think about considering the stock is still relatively at all-time lows.

If you ask somebody who's not familiar with short seller tactics when the ideal time to short a stock is, they'd say well, obviously when it's the most overvalued. duh. But in reality, short sellers almost never do that. They attack a stock when it's already down and usually down dramatically.

It's sort of like the short seller equivalent of buying in at each newer and newer high. like. sure, if it keeps making higher and higher highs, you're gonna have that instant gratification of a profit, but it's also substantially less fundamentally logical and a lot riskier. But of course, on the short side, and especially in the institutional world, it's easier to kick something when it's down than to kick something when it's far, far up.

Even if you do think that it's overvalued and usually short sellers don't even notice that things are overvalued, they're just like, oh, it's going down, must be overvalued Let me put on my big boy shorts. But anywho, according to Ortex data, cost to borrow has gone up another thirty percent. In the last six days, the percentage of free float on loan has also gone up, but interestingly enough, at the same time estimated short interest the last seven days as a percentage of free float has gone down about two percent to percento an increase in borrowed shares and an estimated reduction of short interest as a percentage of free float signifies in my view, a regrouping of short seller artillery which could be used to redump borrowed shares at opportune times for example, to help suppress breakouts, to accelerate weakness on bad days, or to just get a better average short price. And this morning, fascinating enough, you actually had a pretty damn strong bullish setup.

It didn't open in the fives, but it quickly quickly retook the five dollar region and shot up to 537. Why is that impressive? Charlie, Well consider what happened with the overall market today. Short squeeze stocks are supposed to go down three or four times what the market goes down because risk asset. but in this situation, the institutional trading is on the short side already, so there's not as much to dump and call it what you will.

But it moved against the market for much of the early uptrend and by the time it peaked, the S P 500 had already been dumping for an hour and dumping rapidly. So it had huge headwinds against it and it still managed to fight off the overall downtrend today. And honestly, if I'm going to speculate on what happened this morning, I think that you saw a last-minute hedging for the options chain that got dumped onto quickly after peaking. Painting the picture that Adders Battlefield today was fought on the options chain.

The price, though overall, basically have this painstaking fight the rest of the day to hold on to that five dollar battleground. But in terms of the setup into next week, the options open interest for calls expiring May 6 indicate a strong strong concentration above the five dollar strike price. The concentration of contracts at and below Five Dollars is basically nothing nilh compared to the combined concentration at the Five, Five, Six, Six Five, and all the way up to eight. In fact, if you go way out of the money, you even have some interesting concentration at the 10 and even 13 strike price Atra's at the five dollar region.

Right now, people concentrating in contracts this far out of the money implies a strong expectation for next week, and I think bodes very very well for the battlefield that Adder is going to be even as early as open on Monday. And obviously I'm a bit of a creature of history a historical creature if you will, and I like to dive into previous trends. And you look at the last period where actor had a less aggressive short squeeze setup, but still induced massive failures to deliver and massive upside. Well that started on about August 24th, 2021.

You had started your uptrend from about three dollars, it rallied huge and then popped up and then dumped. Then it retook a momentum period which spanned more weeks and weeks, and by September 13th, you hit 1993, which was a dramatic run and then a risk-off period tanked the stock in most stocks and people took profits and then you had a rebound attempt back to the 22nd of that September, which again was tanked by a broader risk off period. Now I think this period of time had a lot more institutional players on the bullish side, not just on the short side, but you had some bullish players in this. Which means that when you have more risk off environments and the market sells off, it's going to be pulled.

Capital is going to be pulled from this stock as well. Whereas in 2022, you're in the situation where institutionals haven't wanted to touch anything on the bullish side. When it comes down to small caps, small caps are kind of considered the herpes of 2022., you look at the current trend and you project it on the last trend. I think it's very, very possible that we are actually somewhere here on the cycle.

I think the very, very aggressive short selling tactics has caused the run on Atta to be a lot slower than the run was back in August, and there's also just not as much volume in small caps. But this time around you also have substantially more aggressive short selling. Which means if this does continue to get buying power, the rally could be substantially more and actually be successful, unlike the one that was in August, which only made it to 1993, even though the potential was for much, much more. Still a good play, but based on the setup, now, if you actually got the buying pressure, it could go a lot higher.

That's it. That sounds a little bit too hypey, so I want to give you an analogy to think about here. At the end of the day, we could talk until the cows come home about how good a short squeeze setup is, how short sellers got super greedy in this position, How you're seeing manipulation or how you're seeing concentrated dumping of shares at certain pressure points. We can talk about how great a setup is, but it's all talk.

It's all talk and talk is cheap until you get buying pressure. What good is over concentration of short selling and a locked up float that would rally really, really fast if people bought it If nobody buys it. When I was in my very early grade school years, I'd go over to my grandma's house and she had an orange tree and she had this little orange squeezing machine. She probably got it from an infomercial and so she'd present me with an orange and a little orange squeezy thing and if combined, I could get juice.

But if they just sat there apart from one another and nobody ever combined them and put pressure on it to actually squeeze out the juice from the orange, guess what? I wouldn't have gotten any juice. You could have the best squeeze setup, but if there's no pressure applied, you're not going to get any juice. And that's just simply a fact. I noticed a lot of folks will go and they'll find a short squeeze set up and say, oh, the short squeeze setup is so, so good.

That means it's going to squeeze. That doesn't mean that at all. You need to have buying pressure. So what I'm saying if you didn't catch my drift is that you can find the best setups in the world and you should try to find them.

But you also need to make sure that your setup is showing proof of concept. Proof of concept means that it's showing that it has its necessary buying pressure. But anyways, folks, that moves us on to the next part of the video, which is on Redbox. So on Monday this week, I made a video breaking down the short squeeze setup on Rdbx.

I explained why. the data shows that short sellers got far too overcrowded and the setup was uniquely ready to rally if applied the correct buying pressure the next day. It made a new cycle high early on before taking with the rest of the market. Similar to the orange analogy, though, the pressure to squeeze the orange just wasn't there as the market dove and Rdbx went with it.

So what good did being aware of the squeeze setup do? Is it still valuable to do due diligence and identify good setups, even if the market in an overall risk off environment can just tank those setups on a dime? Well, of course it's still valuable. It may even be more valuable because knowing that Redbox has an extremely tight battleground and locked up float and identifying a broader trend allows you to be on the front lines when you get the next wave, which ended up happening today and it ran up over 70 percent at heights. I even thought about going down to my local Red Box and renting a Dvd to celebrate the problem, though that I forgot my Dvd player sometime back in like 2012. Overall though, with the setup, it's a very, very similar thing with the early days of Atra.

When we started breaking it down, I didn't know when or where even if you get buying pressure, but I saw the overall trend and I knew that any more buying pressure that came in would be amplified greatly because of the short squeeze setup. The heavier and the more aggressive the short selling, the more of a multiplying effect that buying pressure has. If you want to be able to find rudders before they really run, you have to be able to go and sift through a lot of duds, look at a lot of different setups, look at the characteristics of what makes something run, and then narrow down your search. There are thousands and thousands and thousands of tickers on the market.

If you don't do that, you're not going to find any of the runners before they actually run Today, Redbox ended up being one of the top gainers in the overall market in a day. That was terrible and there's no way that you could possibly have narrowed it down and found it ahead of time without actually familiarizing yourself with the setup. And by the way, when it comes to trading stock, you have to. You have to be able to have both an entry and an exit plan.

I saw a comment from somebody yesterday that said Charlie created a ton of bag holders with Rdbx. First of all, if that's true, your bag is worth about 70 percent more today, so you're welcome for the Louis Vuitton bag, I joke. But seriously, what if this didn't have another rally today? What if you find a stock that I talked about or on your own that you really liked and it had a great setup and you liked it a lot. but all of a sudden you get a huge risk off period.

or this setup just dies. Does that mean okay? Well, I like the setup at one point. that means I have to aimlessly hold it until I die. No, you need to have a clear entry and exit plan always.

If you bought here. For example, on Tuesday morning at say, Three Nine, maybe you made some money on the rally to 475. But then what happened, it sold off back to 317 and then only today it went back up. In hindsight, because it ran so much today, you would have made money no matter what period of time you bought it this week.

But this risk off day completely derailed your first position and could have completely derailed the overall position if you didn't have another rally on Friday. What if instead of having a random approach he said okay, well I'm going to have a clear entry exit plan. you say? Okay, I like the catalyst. I like the setup, but I'm going to wait until it has bare minimum broke above my blue price ranked Sma line on the 30 minute and then when it breaks back below it I'll sell out again.

You can say oh I don't like the Sma strategy. I would rather have something like a stop loss. Okay, well fine. okay.

I'm riding the momentum rally. It goes down ten percent boom, sold out or I'm gonna be more aggressive and I'm gonna set my stop loss at my entry price. It goes back below that. I'm no longer playing with House's money.

Fine, Done. I'm oversimplifying to make a point, but if you don't have a clear entry and exit plan, it doesn't matter how much something's going to run, you're just going to end up losing money if something goes up 3 400 percent. Well, you're just gonna end up losing that when it goes back down because you have no real plan on when you're going to sell it. Okay, so what about next week Charlie? Well the benefit of an end of the week runner is that it causes people to talk about it over the weekend and causes it to get hype and more eyes which can build up and accumulate for the Monday morning open.

When that happens, you usually get a nice pop and then some profit taken. and then and then you get into that crucial zone of can it hold relevance and retain some value. And if it can, then you start getting another rally on top of that, especially if you have a very, very tight short selling situation where short sellers have already really thrown everything they have at it. and this one's actually a lot tighter than pretty much anything else I've covered in a while, to the extent that if you continue getting increased volume, this is going to go insane.

Next week, the setup is 50 of free float is sold short, but where it gets really insane is that 92 percent of free float is on loan. That is super rare. That means that the ability to borrow is really, really restricted right now. That means that future transactions are going to be a lot more one-sided Which means people who are buying or selling their current shares are going to be driving prices more so than short sellers you're going back to after how much of free float was on loan there 77, which is super duper high don't get me wrong, but there's still room to expand that, albeit slowly with after they through the book with Redbox, they kind of maxed it out.

And I think the reason for this is because with Redbox, it's objectively a bad company. it's a bad business model, doesn't make a lot of sense, and it's going to be very, very difficult for them to pivot. which means it's a lot easier for short sellers to justify shorting it, whereas with attributes a lot harder and a lot more mixed. But the problem with Redbox is that this maxin out of short selling has opened up short sellers to a huge ricochet effect If you get enough buyers and short interest has really been skyrocketing during this time period, and we're now at all-time highs according to Ortex, Despite the fact that again, we were trading so far down from prices, that would have been far, far better to short at.

So in totality, watch the sentiment over this weekend. My bad is again, you'll get that pop. Early morning Monday, you'll get a wave of profit taken, and then we'll get another upward push Tuesday or Wednesday. I do have a feeling that we're going to end up seeing some more runs next week because of the broader trend, but if not, why not already set an exit plan to lock in your profits? Why not already set an exit plan to say? Okay, well hey, it did a really good job so far.

I played it well. Now it's time for me to lock in those profits. Maybe you're already locked in profits because you didn't want to hold over the weekend. Great, whatever it is you have to have an exit plan.

An exit plan isn't Yolo Moon? Anyways, that caps off today's video. Have a great weekend folks. Our coupon code never give up. We'll be expiring tomorrow night on Ziptraderu, so check it out with the link below and have a good one.

I'll see you Sunday.