Head and shoulders reversal pattern completes by next weekIt's been said that copper XCUUSD has a PhD in economics because of its predictive price action. In other words, what happens to copper tends to happen to the markets at large. That's why I always keep it on my radar. If this reversal signal completes there are plenty of structural fundamental reasons why we might see a rather devastating downward movement. I should add that this signal should complete in lockstep with the time frame that reputable analysts and bankers have predicted will bring a very nasty downturn.
Our markets have been propped up for quite some time. In the shadows of the bullish sentiment that the market's given us in this Fed-fueled run-up, there are now voices echoing caution about the big banks being over-leveraged on certain famously over-leveraged short positions that are getting louder and louder every day.
Some of these more precarious over-leveraged positions have been accomplished through share lending/borrowing/rehypothecation. That is the artificial dilution of a company's stock, supposedly performed as a service, by bad actors like Citadel. That practice has long been suspected to have been done to keep share prices of certain securities artificially low. These are securities were assumed to be dead in the water because of COVID, barely living carcasses being picked apart by scavengers. It's rumored that Citadel et al, expecting shareholders to be easily scared off by their vulnerable business models, had taken naked short positions in these securities. What with their artificially diluting them and somewhat sentient shareholders able to see the writing on the wall, these bad actors thought they'd be able to run the companies into the ground and they'd feast on what was left.
For example, there is a statistical probability that there are shares in excess of all the shares ever issued by AMC in shareholder accounts right this moment. You can't get there without the creation of synthetic shares, of course, and there are only a few way synthetic shares get created. It certainly isn't because of little Joey Rosenblatt playing with his Bar Mitvah money on Robinhood, is it?
The really bad news for those who've engaged in creating synthetic dilution is that there's been a grass-roots share count. It's been verified by a software called Plaid threads with brokerage APIs to show how many shares there are in participating shareholder accounts. The count finished this past Sunday and at the minimum there are 3X the issued shares out there. This can only be accomplished through methods available exclusively to big players like CItadel. It's due to share lending, rehypothecation, and ETF arbitrage. That's a big, big mothereffin problem. They're going to eventually have to buy those back to close those positions. And that's just AMC.
Let's turn to another similarly f'd up naked short position...
Janet Yellen, in her side-job working as Secretary of the Treasury, has been quietly fighting crypto provisions in the new infrastructure bill to protect her true masters at Citadel. If you didn't know, she's doubled her net worth in the past couple of years by capitalizing on her ability to influence what happens with regard to monetary policy. One thing we know for sure is that no one talking at their computer has ever made that much money doing it for so little time. At least, not with their clothes on. Certainly no one with that much to offer in terms of information and/or influence big banks would want with regard to the US government.
Why does the crypto provision draw so much of our attention? Because the US government wants to try to centralize crypto. One reason why that's significant right now is that a similarly over-leveraged security, GameStop GME, is believed to have at least as many synthetic shares in shareholder accounts as AMC. The percentage of synthetic shares may dwarf those of AMC, and the new head honcho seems to be preparing to bring the company into the blockchain space. The major concern that anyone over-leveraged in their short position would have with this is that it's up to those with short positions to pay any dividend a company might issue on a one-to-one dividend-to-share basis. If the company decides the dividend is to be something that can't be expressed in dollars and cents, but something that can only be expressed in 1s and 0s, then that can lead to a share count. If that happens then the synthetic shares that had been created to short the company will come to light, it will reveal the true supply/demand relationship, and thereby price discovery will follow.
Due to legal gags on information about official share counts there's no way for the public at large to know for sure how many synthetic shares have actually been created. There are those who know but they aren't allowed to tell anyone. Before you ask, yes, they're still allowed to describe it as a free market despite this bullshit, totally insane practice of hiding the true supply and demand. What we know is that they've done everything they can to get shareholders to sell. They've been routing buy orders away from lit markets to keep those purchases from creating upward pressure on the price action. They've been flooding both mainstream and social media with all kinds of misinformation and purposefully misleading asshattery. These efforts alone have been glaringly conspicuous, laughable in how poorly hidden they've been. They've tried and failed time and time again.
Shareholders aren't selling.
And all this time the premiums on their short positions, all the fees for their borrowed shares, it bleeds them continuously. While they've been dripping dry the shareholders continue to buy more and convince others to do so.
All this at the same time as a housing crisis once again looms, big banks break records selling bonds, and a cresting tidal wave slowly towers over the coastline.
Or I'm wrong and copper's fine. This is just me seeing, ya know, what I want. Or something.
