At some point, the clock strikes midnight for meme stocks. The one exception sits with Gamestop (GME) , but even those shares are $100 off their all-time, meme-craze highs; the CFO just stepped down, the company is pulling back from its move into crypto, and it continues to lose money. Last month, the CEO was removed, and if it weren't for Ryan Cohen buying another $10 million of stock, things probably would be worse, but this isn't about Gamestop. I mean, Gamestop is the "winner" here.
Legacy trucking company Yellow Corp. (YELL) officially filed for Chapter 11 bankruptcy protection, but we knew it was coming. Yellow already discontinued operations, but management finally made it official over the weekend.
Why does it matter?
Well, Yellow shares had run from under $1 to $5 just last week. It was another example of how sometimes things simply don't hold any logic. Everyone knew bankruptcy was on the horizon, but buyers flooded the market and the big short interest got squeezed.
Yellow's stock only took a week to give back 50% of the move. From here, we're headed to pennies, if that, and I still can't commit to the idea YELL won't have one more run higher.
Does it deserve it? No.
Would I buy this stock? Nope.
Should you buy it? Probably not.
But YELL is another reminder that the market can remain illogical longer than most can stay liquid.
The continued upside in the underlying indexes helps these meme types of stocks rally. Yesterday's bounce in large-caps, small-caps and techs helped end four days of struggles. We're through earnings season, but now have July's Consumer Price Index (CPI) and Producer Price Index (PPI) reports at the end of the week. Bulls will want to see a tame number, nothing to give the Fed any reason even to consider another hike this year. If we get a hot number, I would tighten up trailing stops and let other buyers play the hero role.