GⓂ️E VS VIX

30 באפר׳ 2021

Good evening apes and apettes! I've been taking several notes since the epic first phase of the GME stock short squeeze. I had a hunch that there was a positive relationship between GME and other "meme" stocks against the VIX. This hunch was later confirmed by a Redditor who took the time to illustrate the correlation between GME and the rest of the markets. Whenever GME would rally the VIX would quickly follow and the entire market would go down subsequently. Now the VIX and GME are once again aligned. Both look to be on a bullish trend, but is this enough to warrant a squeeze? A few weeks ago a report came out stating that JPM and BAC two juggernauts in the banking universe sold the most bonds in history. They must be preparing for some major events because the news was announced one day after they reported "amazing" earnings. Something didn't add up so I did some more digging which comprised lurking on reddit for more info and doing some DD of my own pertaining to margin debt levels (which are extremely high right now). Moreover, I noticed the government will be selling zero coupon bonds in other words pure discounts bonds. Zero coupon bonds pay zero coupons as the name implies so there are no sets of level sequential cash flows. You might be wondering how on earth could that be lucrative? Great question, zero coupon bonds can be worthwhile when the market is underperforming or when interest rates are low to the point that people would rather invest in the pure discounts bonds and have realized gains from the difference in the price of the bond and the par value (par value is also referred to as face value in the context of bonds). Not only will the gov sell them on 05/04/21 but the maturity will only be for approximately 4 weeks till 06/01/21. A reddit user also concluded that the last time the government issued a bond with similar characteristics was in 2015 and the last time before that was 2012. Why am I telling you all this? I have reason to believe that GME still has potential for upside and that given the statistical significance between GME and the VIX I'm convinced that the squeeze may be delayed but it is ultimately inevitable. Banks raising money after reporting great earnings and after the fiasco with Archegos is more than just coincidence something is afoot and I'm merely following the gorilla foot steps!

Be sure to leave a comment, let me know if you liked the DD. Enjoy your day, apes together strong! 🦍🚀

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