Welcome back to the channel everyone today, i want to tell you the real reason why amc is dropping and how this is going to impact the squeeze. I also want to talk about the shares that are currently available to short and how this also ties in with the short squeeze as well so stay tuned and let's make some money, and now i want to dive straight in with the key information. So, let's start by talking about why amc is really falling. This video is going to be a little bit different to my usual videos.

Usually i cover the news and give my opinion on that news, but today i'm not really going to use as many sources and just explain to you why amc is falling now. I think there's two main ways: we can approach this. Obviously, there's institutional investors in amc and there's also retail investors in amc as well. So i want to start by talking about: what's happened to the institutional investors today and then later in the video.

Obviously i'll talk about what's happening with retail investors. So this here is a heat map of the entire s. P 500. On finvis.

As you can see, it was a very, very red day in pretty much every single industry. The only stocks that were up today was apple, pfizer and tesla. This entire market drop was basically caused by some pandemic news. It impacted pretty much every single stock in the s, p, 500 and obviously also impacted amc and gamestop as well as well as many other stocks, not in the s, p, 500 and other small cap stocks.

So what does that mean and what impact does that have on the large institutions that own 89 of all stocks in the entire market? Well, obviously, those large institutions have lost money now many institutions trade with their own money, but at the same time many other institutions also borrow money to amplify their gains, but unfortunately also amplify their losses. So that means that pretty much every single institution across the entire market is going to have lost money. Today, some institutions will have lost more than others. Some institutions that are very heavy on apple won't have lost much money, but some institutions, for example, that are very heavily leveraged on facebook, will have lost a lot of money.

So what happens regardless of whether institutions lose a lot of money or gain a lot of money? Well, they often tend to reshuffle their portfolios. If they've lost a lot of money, maybe one of their big holdings is smaller than they really want. It therefore they'll sell off some of their other holdings and add to that falling position. They'll effectively double down on their high commitment plays, let's say, for example, there's an institution out there that has a very high commitment on facebook.

Therefore, today maybe they took some profits on apple sold off some of their apple position, to reduce the size of the position and then invested that money back into facebook, maybe they're trying to specifically keep facebook at 10 of their portfolio. Today, maybe it fell to 9 and apple accidentally went up to 11, but they only wanted apple at nine percent. Therefore, they sell off two percent of their apple and buy some more facebook, but so how exactly does that impact amc? Well, obviously, there's a lot of hedge funds that are currently long on amc, for example, vanguard which we know of blackrock, which we know of state street, which we know of and many other institutions on this list that have a large long position on amc. Now maybe an institution's position in facebook fell more than they wanted it to to a smaller allocation of their portfolio than they really wanted, and therefore maybe they sold off some amc today to add to their facebook position.

So, ultimately, i think the price drop today has been caused by institutional investors selling off some of their positions in amc to reallocate their portfolio holdings. That's why the entire market today is down, obviously on that news and they're all reallocating their portfolios amongst various different stocks. If you didn't already know, i personally use blockfi to invest in cryptocurrency. Not only can you just buy some bitcoin, but you can also earn interest on your deposits up to 9.5 per year paid in cryptocurrency, so you can continue to accumulate more and more and more bitcoin.

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Does this mean that amc squeeze is over? Well? No, i don't think it does at all. If anything, i think this is almost a good thing. If these hedges are having to desperately shuffle around their portfolios, it means they've lost a lot of money today and could potentially be close to being liquidated or being margin called at the end of the day when the market crashes, we know that amc is going to Crash with the wider market, because there's going to be so many long, hedge funds like vanguard and blackrock that need to sell off their amc shares, but there's also many short hedge funds that are shorting amc, especially naked shorting amc that could get liquidated and when they Do get liquidated they will have to cover their shorts. So therefore, amc falling with the rest of the market.

If anything is a good thing, because it means those short. Hedge funds lost a lot of money today on their long positions and could potentially be margin called and forced to cover their amc shorts. Yes, obviously, blackrock and vanguard lost a lot of money today as well and as a byproduct had to sell off some amc. To reshuffle their holdings, therefore, today amc was a bit of an innocent bystander that got hit by the wider market drop, but this could be a good thing going forward for amc.

We know that there's likely going to be a two to three week, delay between the market crashing and those short hedge funds being liquidated and forced to cover their amc shorts, because obviously those hedge funds aren't going to get liquidated on day. One of the market crash they're gon na survive for maybe a week or two, and then it is going to take some time to obviously liquidate the entire hedge fund and force them to cover their amc, naked shorts. But obviously in amc. Not only is there institutional investors, but there's also retail investors, so what's happening today with the retail investors, just in case you didn't already guess.

Obviously us the amc, apes and retail investors are not selling the stock. The strong apes are here holding the line day in and day out us retail investors aren't leaving. Obviously most of the paper hands have already been shaken out. Maybe there is still some paper hands left to shake, but the majority of people holding amc.

The majority of those retail investors are holding amc today and not selling, potentially even buying. Even more now, you might say well, hang on tom, isn't 80 of the float owned by the retail investors and only 20 of the flow owned by those institutions. Therefore, how can those institutions drop the amc price so much with such little holdings? Well, i think we've got to talk a bit about basic market dynamics and how the market works based on supply and demand. Obviously, if there's lots of supply, the price goes down and if there's lots of demand but little supply, the price goes up.

So you've got 80 of the float that's being held by the retail investors. But what are the retail investors doing? Are they buying and creating more demand, or are they selling and creating more supply? Well, on a majority basis, it's neither of those apes are holding their stock they're, not necessarily buying tons more but they're, obviously not necessarily selling. Yes, i do think today a lot of people probably did go out and buy the dip, but potentially not every single ape that holds amc could buy shares today. Maybe they bought some shares yesterday.

Maybe they bought some shares last week and maybe today they didn't have any money to add to their amc positions. Maybe people got paid last week on a friday and obviously bought amc. Shares on monday, therefore didn't have any more of their paycheck today to buy more amc. So, therefore, the majority of retail investors today held their amc and they didn't necessarily buy or sell, therefore didn't create any more additional demand or any more additional supply, maybe obviously some apes did buy.

I don't really think many apes at all will have sold, but what i think has happened is that more institutions have been selling their amc to reallocate all of their portfolios and that selling of institutions today outweighed the buying by retail investors. But so why might so? Many of these institutions be reallocating their portfolios today, away from amc. Why are they trying to drop the price of amc so much, and what do they plan on doing in the future, so springs or shakeouts usually occur late within a cycle and allow the stock's dominant players to make a definitive test of available supply before a markup Campaign unfolds: this allows the large interests to mislead the public about the future trend direction and to acquire additional shares at bargain prices. A terminal shakeout at the end of an accumulation phase or an accumulation cycle is like a spring on steroids, so in wipe off accumulation.

This effectively is phase c, where the hedges and the large institutions dropped the price of amc below the support to shake out any final remaining paper hands before taking the stock higher to simplify. This is a move that happens in wycop accumulation in order to shake out shares from weak holders in order to allow institutions to acquire more stock, and not only did this happen in amc today, but it happened across the entire market. Many retail investors will have seen this giant wall of red and potentially will be selling their stocks across the entire s p. But obviously many institutions are just going around and buying these dips potentially to take the market higher over the next few weeks, especially if that debt ceiling does get lifted.

Okay, tom - that's all well and good, but what does the data show? Well, i want to talk about some short interest data, obviously from ortex, and i also want to talk about the shares that are currently available to borrow and how that ties in with the squeeze, as you can see here from this line in orange, the estimated short Interest percent of free float has been falling over this current month of november, but also the previous month of october as well, but we can also see from this green line here. The average age of shares on loan has been increasing through the last two months and also the average days to cover has also been increasing as well. So, let's start by talking about days to cover you've got two main variables here: you've got total shares, shorted and you've also got average daily volume. If the average daily volume is decreasing, then the average needs to cover will increase and obviously that's what we're seeing happen.

The volume is decreasing and therefore the days to cover is going up, but obviously, if the total shed shorted was going down heavily, then we'd obviously see this average days to cover decrease or potentially at the worst stay flat. If volume is decreasing, but short positions are also decreasing, then days to cover stays flat. So let's also talk about the average age of shares on loan. Obviously, there's going to be some very, very old short positions and some very, very new short positions.

If there's loads of new short positions, then the average age is going to go down, but what we're seeing is the average age going up now? The reason we're seeing the average age going up is because there isn't many new short positions being opened, but also there isn't many old positions that have been closed. So the reason for this decrease in the orange line, which is the estimated short interest percent of free float, is because there's new shorts being opened up, but then being closed very very quickly. Therefore, it's not causing the average age to go down, and it's not significantly causing the average days to cover to go down either. So that basically means that all of the old large short positions are still opened and haven't been covered or closed and any new short positions that are being opened are being closed rapidly and basically just passed between the hedges.

Now i want to talk about this massive breakthrough in the number of shares available to shaw, as the number of shares available to short is now going up. But what does that exactly mean back in january? The number of shares available to short, was going up at an alarming rate. Why was that? Because? Obviously shorting amc back in january was a very, very bad idea. Back in january or pre-january, a little bit amc was trading for around two dollars.

A share and hype was building around the short squeeze. Therefore, it was a very bad idea to short amc back in january. Obviously, if people were shorting amc back at two dollars, they soon found themselves underwater. Obviously, as amc ran to around twenty dollars, but through the back end of february and may it was a good move for hedges to shore amc, because obviously, amc fell from around 20.

All the way back to around six or seven dollars, but then back in may, obviously in june it was a bad idea to short amc again and therefore the number of shares on loan was going back upwards. Obviously, because hedges did not want to short amc, even though the borrow rate was so low, they knew back in late may that shorting amc was again a bad idea, but then, through july august and september shorting, amc was obviously a good idea, as amc fell from Around 72 dollars back down to around 29, therefore, hedges were scrambling trying to get as many shares as they could and shorting them. But now, in october and november, those shares available to borrow have been going up again at quite an alarming rate, especially over the last few days in november. There's been so many amc shares available to shore, but the hedges aren't really picking them up.

They don't want to short amc, even though the borrow rate is low and supposedly amc is going back to a dollar a share. The hedges don't want to short more amc as stonk's batman summarized. A green trend up means that it's not an attractive stock to shore, and this is bullish. A red trend down means it is an attractive stock to shore and therefore it's bearish, as you can see at the moment, through october and november, the line is green, which is good news for us apes in january and june, at the peak of shares available to Short so here and here also correlated to the peak in the amc price and therefore at the moment in november, i don't think we've seen the peak of shares available to shore.

I think that'll happen in december or maybe january, when the amc price runs up again and the amc stock potentially enacts the short squeeze. The reason why i know that amc is not a dead cat is because, still to this very day, amc is the number two trending stock on weibull. Only behind sheba enu, which you are right, isn't a stock. It's a cryptocurrency, but pretty much every single day of 2021 amc has been the number one or number two, or at least top 10 shares talked about on every single platform, whether thus weeble, whether it's fidelity, whether it's wall street bets pretty much anywhere amc is always Still up there, and therefore that is why amc is not a dead cat and why the amc squeeze is not over guys, be sure to.

Let me know down in the comments below what you think. The real reason for amc's price falling today is, and if you haven't already be sure, to check out the patreon and join the private discord linked in the description below. If you ever want any help with the amc or gamestop or any other stocks out. There be sure to join the patreon and become part of the team and, as always guys, if you enjoyed this video, be sure to check out some of my others.

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