For a couple of days now the market action has been obsessed with huge short squeezes in a number of 'junk' stocks. There has been raging debate about the merits of the empowerment of small trades working through social media versus what institutional Wall Street views as 'manipulation'.
The little guy is losing the battle this morning as brokers restrict trading in targeted stocks, and now there is a report that Robinhood is placing freezes on accounts they suspect of market manipulation.
The broker action has killed the momentum in these short trades, and we are now starting to see some rotation back into other speculative areas. The main theme I see right now is a return to Bitcoin (GBTC) , which has pulled all the way back to its 50-day simple moving averages. Stocks that are levered to Bitcoin are moving as well. (MARA) , (CAN) , and (RIOT) are the primary names on my screens.
It is healthy for the market to see the end of the short squeeze trade, but the manner in which it is done is going to enflame many small traders. This is a group that is not just going to go away. They will continue to be a market force, and if you want to make money, you will need to know what they are doing next.