The meme stock mania is back?

Slow last week, but a much more exciting one ahead

Quick summary:

• The Q2 competition is up & running - click here.

• Last week it was mostly flat with a gradual grind up. SPX rose above its 50-day moving average, indicating a potential continuation of bullish momentum in the market, and an end to the correction. Whether this materializes, we will know after CPI prints this week. CPI data is released tomorrow before market open.

• The meme stocks are back! Roaring Kitty has tweeted, GME rallied 80% in one day, and was trading over 140% overnight. Same for AMC. Yes, it’s unbelievable, but it’s true. A bunch of tweets are creating another mania. Another thing we’ll have to keep an eye on.

• Over the weekend we will examine the inflation numbers and the market reaction, not only to inflation but also the meme stock trend. Things are shaking up again.

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The competition

Great performance all around in this week's leaderboard, showcasing particularly strong results in DJI, SPX, and QQQ segments. A special shoutout to our top 10 for their insightful predictions.

Consistency is key to staying in the top. And good predictions, obviously.

NOTE: For all those new to the whole thing, read more about it here or watch a video of Scott and myself guiding you through the survey, showing you all its features, and briefly explaining how the competition works.

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Last week’s performance

Markets experienced a steady climb last week, driven by continued strong corporate earnings. Thus far, 78% of S&P 500 companies surpassed expectations—a trend bolstered by major tech and energy firms. Despite a flat start to the week, technical indicators suggest a bullish momentum, as the S&P 500 moved above the critical 50-day moving average.

This week, the spotlight is on the PPI and CPI data, which is crucial for understanding the ongoing inflation trends that are influencing Federal Reserve policies. With a series of speeches lined up from Fed Chair Jerome Powell (later today) and other Fed officials, we might get even more volatility.

And then there’s also this:

Meme stocks (stonks!)

I never thought I would see it again. Gamestop (GME) Monday close at $30.45, then overnight trading on Tuesday with a +140% increase. If you were trading in January 2021, this is exactly what it looked like back then. One day, the stock doubles, you think no way can this move any further, and then in pre-market it’s trading +150%. And it just keeps on doing this, over and over again. The short squeeze, the “diamond hands” HODL crowd, the WallStreetBets retards/monkeys, it’s all coming back.

All initiated by this man: Roaring Kitty, real name Keith Gill. They even made a movie about it, called Dumb Money (saw it recently, not bad, but like any movie based on real life, a lot of things were not mentioned, and some things were farfetched).

Roaring Kitty published a bunch of tweets yesterday and today, and it all went soaring back. Just like in Jan 2021. And it’s pulling up the rest of the meme stocks, AMC in particular:

Will this have an implication for the market overall? Indirectly, almost certainly. If we get another meme stock mania, with financial conditions as loose as they are, and amidst sticky inflation, I highly doubt the Fed will cut interest rates.

Let’s see how the week passes, very exciting things coming up.

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DISCLAIMER: Neither the survey nor any of the contents of this website can act as investment advice of any kind. The results of the survey need not correspond to actual market preferences or trends, so they should be interpreted with caution. Oraclum Capital, LLC (Henceforth ORCA) is a management company responsible for running the ORCA BASON Fund, LP, and for organizing a survey competition each week, where it invites the subscribers to its newsletter (this website) to participate in an ongoing prediction competition. The information presented on this website and through the survey competition should under no circumstances be used to solicit any investment advice, nor is it allowed to be of commercial use to any of its readers. The survey and this website contain no information that a user may use as financial or investment advice. All rights reserved. Oraclum Capital LLC.

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