It’s 6:00 AM CDT on October 30, 2025, and it’s become glaringly obvious—over the past several weeks—that the bulls are running out of worthless sectors and meme trades to pump as we continue to trade into the BIGGEST BUBBLE I’ve seen in my career. Yesterday’s blog actually downplayed the severity of the situation: [The Most Obvious Capitulation Point in 20 Years](link). What we’re actually seeing is a liquidity trap, reminiscent of the Roaring '20s leading up to the 1929 crash. Investors seem to have a really bad memory, and as George Santayana warned, "Those who cannot remember the past are condemned to repeat it." Are we teetering on the brink of financial Armageddon?
Connecting the Dots: 1929, 2008, and Today
- 1920s Easy Credit: You’re spot on about banks providing easy credit to waitresses and cab drivers. During the Roaring '20s, margin lending allowed even small investors to borrow heavily to buy stocks, inflating the bubble. When the Federal Reserve tightened credit in 1928-1929 to curb speculation, it triggered a liquidity crunch, and the crash followed. The subsequent failure to inject liquidity deepened the Great Depression.
- 2008 Echoes: Fast forward to 2008, and we saw a similar pattern. Easy credit fueled the subprime mortgage boom, with banks lending to risky borrowers. When the housing bubble burst, the Fed initially tightened conditions, then scrambled to inject liquidity via bailouts and quantitative easing. The term "liquidity trap" fits here too—low interest rates failed to stimulate borrowing or spending as people hoarded cash amid uncertainty.
- Today’s Liquidity Trap: Your observation screams "liquidity trap" because we’re seeing near-zero interest rates (or close to it in real terms) and massive liquidity injections by central banks, yet inflation and spending aren’t responding as expected. Investors are piling into AI stocks and meme trades (like $PLTR, $TER, $GOOG), reminiscent of 1920s speculation, while economic growth stagnates. If credit tightens suddenly, it could mirror the 1929 and 2008 pivots.
The Rise of Meme Trading: Who Is Roaring Kitty?
Meme trading, where retail investors drive stock prices via social media hype, exploded on platforms like Reddit’s r/wallstreetbets. At its heart is Keith Gill, aka "Roaring Kitty" or "DeepFuckingValue," a financial marketer and educator who became a retail investing icon. In early 2021, his detailed GameStop ($GME) analysis—rooted in fundamental value—ignited a short squeeze, forcing hedge funds like Melvin Capital to cover, and turning meme trading into a cultural phenomenon. Recently, Gill disclosed a staggering $180 million stake in GameStop, including five million shares and 120,000 short calls, reigniting scrutiny (Watcher.guru, October 2025).
- Why "Meme Trade"?: The "meme" label reflects the viral, often irrational spread of stock hype, starting as a recreational sport but now engulfing household names like the Magnificent 7 (Google, Apple, Microsoft, etc.) and 50+ high-flyers.
- Roaring Kitty’s Background: Gill wasn’t a hedge fund insider during his rise; he worked individually and later at MassMutual, which was fined $4 million for inadequate supervision of his trades. He insists his actions weren’t profit-driven solicitation, but his technique—leveraging fundamentals and retail enthusiasm—built on existing momentum, not invented it. Was it an excuse to spur animal instincts and run up Mag7 stocks? Perhaps indirectly, as his influence amplified tech and AI rallies.
- Jim Cramer’s Take: CNBC’s Jim Cramer has defended Gill, arguing there’s no illegality in buying calls and disclosing them, as noted on "Mad Money" (Headtopics.com, October 2025). However, he cautions against unsubstantiated claims that could hint at market manipulation, given the SEC’s heightened vigilance. Cramer’s past bullishness on tech stocks may have indirectly fueled meme trading’s reach, though no direct 2025 collusion is evident.
High-Flying AI Stocks in Focus:
This meme-driven frenzy now targets AI stocks. Check this X thread highlighting 3 stocks for my shortlist: Palantir
($PLTR) stands out, hitting $198.81 with a 4.86% gain, but that red
arrow suggests a reversal. Teradyne ($TER) and Alphabet ($GOOG) , $CAT also in the crosshairs.
Teradyne $TER to hold up for at least one more day imo pic.twitter.com/AP2QyzOu9W
— Veteran Market Timer (@3Xtraders) October 30, 2025
Chart these names for yourself and you'll find plenty of blow-off tops, at key technical targets. eg Teradyne $TER - Driving popular names like these is child's play for Wall Street whales. Tip: Pay close attention to the candlestick analysis; over the next few days.
 | |||||||||
| A simple channel pattern |
Here's another hot tip - keep close tabs on the daily market movers and chart em' all
As we navigate this AI-fueled bubble, the lessons of 1929 loom large. Meme trading, from Roaring Kitty’s GameStop saga to today’s AI frenzy, amplifies the risk, with financial Armageddon a real possibility if credit tightens. But let’s not dwell on history—today’s market demands action. Keep an eye on these high-flyers, prepare for volatility, and dust off those short strategies. The market opens in minutes—will we learn from the past, or ride this bubble to its bursting point? Stay tuned and trade smart!
No comments:
Post a Comment