Not much has been happening in the stock market in the past few days. Yesterday, the S&P 500 went down 0.15%. So, it barely moved at all. Really the markets rallied last month and came into this month with an overbought condition. That can lead to a sharp drop like we saw in March and in early May for many of the fad stocks and the ARKK ETF or a simple drifting move. The latter is what has been happening.
I really don’t think much is going to happen in the markets until we get into the July earnings season.
As a result, I don’t have much to say today this morning before the open, so I’ll talk about something I have not said a single word about even though it has been the topic of fascination across the financial media.
That topic is the big rally in AMC stock, that has been driven by much of the same things that drove Gamestop up earlier in the year, and just like that stock did AMC has caused the masses to pile into it in a frantic manner.
So many people with Robinhood accounts have bought it that it is the third most owned stock on there.
Now Gamestop also came up to the top of the most owned list just as it topped out earlier this year.
People on social media have been saying that people should pile into AMC, because everyone else is going to do it, so you want to buy ahead of the masses.
But, if it is now the third most owned stock on Robinhood aren’t the masses already in?
It looks like it is topping out to me.
In fact, in the past seven days several board of the directors of the company have been selling millions of dollars worth of shares and cashing out, so these guys think it is better to be a seller than a buyer of it.
Who is more apt to be correct now?
The people on Robinhood chasing the stock and listening to Twitter traders or the corporate insiders?
Personally, I don’t care and it is why I have not said a word about the stock, until now.
I buy things that I believe in that pay dividends and are in sectors that are beating the market. I have reasons beyond trying to game a short-squeeze or throw myself into a trading herd to put on a trade when I do one. What Bitcoin has done over the past few months to people who bought over $50,000, believing in the Twitter talk that it would go to $100,000, shows you where herd trading leads one.
Yesterday, I did a post showing my own Robinhood Account, with the positions I own in it. If you missed it go here.
And if you have yet to look into my top stock pick for this month go to my post on it here.
-Mike
