AMC update 8/25/21 and Why do I choose options as level indicators?

I was impressed that the Ape Army could actually gather enough apes to initiate a March on Rome. They had more success than expected. But as I said, if they can gather the needed trading volume, above average, for at least 2-3 days they can drive the price above $40. And that is what they did. on last Monday they traded 260,000 option contracts and on Monday and Tuesday they traded 1 million and 1,2 million respectively. Look at the "Open Interests". These are the levels.

The funniest trade I saw was the buying of the $80 Strike long Calls with expiring this Friday. The price they paid for 9,700 contracts was about $800,000. Quiet a pricy bet.

Why do I choose options as level indicators?

If you following option trades on a daily base you can establish which options are bought and how many at which levels. You also know where the Market Maker Sweet Spots are. You also can see kind of into the future by determine how many options are bought with a longer term and at which levels. Those levels disappear with expiration date. Not all but many. And you can see what the sentiment is by comparing the Call to Put Ratio over weeks and which options have a longer term. You will see the turning point.

For example, AMC walked through the $40 level on Tuesday. The $40 level was a ceiling /resistance level with a lot of Call options. Now, while with shares I do not know where people set their Stop Loss, or Take Profit, with options I know their Strike Price and open interest volume since they are derivatives. Knowing for every call contract there are 100 shares, and assuming there are logical and psychological levels where people put their SL or TP points I further assume those levels are identical. They are increments of 5 or 10 points depending on the price of the underlaying. But thus I can determine if
a level is strong or weak. And 40 Is a strong level.

Conclusion

As soon as AMC broke 40 I knew this level was of importance. Right now there are about 20,000 call contracts counting 2 million shares. And the shares trading volume on my platform indicated.

I converted my 21 January long Puts into diagonal Spreads by selling Puts at $37 Strike to receive a credit. This short put is expiring on September 24th.

So, i dont think AMC will close below 40 this week. I bought 100 shares, went long. Lets see if the Apes will eat the bait.

Today, Thursday 26th, trading volume of AMC waned at New York lunch time. It is sitting at 32% and it seems the steam is out.

The Battle of AMC, Tuesday 8/24/21

Today the Ape Army gathered momentum and drove the price higher. 

The average share trading volume was surpassed by 30% and reached 225 million shares. At the same time over 1 million options contracts changed hands. 75% of which were call options and 25% put options. AMC was traded  at a volume today as almost all last week. This is impressive. Since the options are all over the place I do not give credit to any institutional money. These were traded by retail traders.

Did uncle Joe hand out all the stimulus checks already?

If the apes want to press forward they have to continue the pressure and surpass the average daily trading volume. This is what I said all along. And here they come.

The levels are:

At the $40 we have around 20,000 Call contracts with about 2 million shares.

At the $45 we have about 8,000 Call option contracts sitting. These two levels existed already yesterday and might just have changed hands. The open interest contracts didnt change.

The Apes increased their presence at the $50 level from 2,000 to almost 10,000 contracts. Then they laid some weaker levels all the way up to the heavy $80 resistance level. Here we have about 15,000 contracts sitting. 

There are about half as many open interest in Put options out there than Call options.

The Put Options, support levels, are at $37 with about 9,000 open contracts and then at 32 (6,000) and 31(4,000).

The Sweet Spot for the Market Maker sits at 35-38. Since the price of the underlaying is sitting at $44 I can say the pressure to the upside is quite high. Otherwise the MM would have dropped the price right back into the range. They couldnt do it. There are about 107,000,000 contracts to expire this Friday with an estimated value of 200,000,000.00 Dolas.

The apes loaded the $80 Resistance level with some smarter call options. They paid more and bought some time to stay longer in the game. From the 15,000 contracts about 10,000 will expire this Friday and 5,000 next Friday. Also this storm will go by.

Consequences.

My 21 January Puts sitting at $37 evolved from long Puts into a short Straddle with different expiration dates. The Puts I sold with the same strike but different DTE. Thus if the price stays above $37 until September24 that would be just great. Why?

For selling the puts my position is hedged and the potential losses with AMC trading above $40 now, received a credit, which makes up for the negative book value. So, there is no loss to my position wherever the market wants to go. Its fine with me. Even if it drops below 37-35 my long put will eat all the losses of the short put. 

First I thought of selling them at $38 or 39 but I pressed the button too quickly. Thus, it became a straddle instead of a Strangle. I like more to strangle. LOL

In the technicals of the daily charts we can also see that MACD is crossing over and SMA 5 and 20 are also crossing. I believe that the apes will take that as an initiative to drive the price up this week. I am fine with this. 

In the long run I still believe in a decline of AMC. This company is not worth a penny.

What to do in the next 6-9 months with existing risk factors?

Educate yourself to come to a conclusion.

Do not blindly follow "experts". In the current situation we are facing several risks to the stock market. I listened to a lot of so called experts. They tell you what sounds great, what you want to hear. Most of them get paid for being on the show even it is a ZOOM call without pants. They talk anything and get paid. Do they do any research or do they collect opinions off FB and Twatter? My experience is stop listening to background noise. Improve your own skills and do research and LEARN economics and financials. The Market commentary will always be totally diametric. As a seller of an asset in a trade and the buyer of the same asset have both diametric expectations of the market. So find your own.

There are a few good YouTuber out there I listen regularly in but even though I like them and they put positive thoughts into my head do not trade what they say. You can take the idea but you MUST do your own research. It is said that any stock pick of an "expert" is as good as letting a chimpanzee chose any trades. The outcome for the Chimps is better by a bit.

If you killed your account in the process come back and let me know how it worked out. Or after you lost your first account of $20,000.00 and you got up again, we can talk about your baptizing. All good traders lost a huge amount of money before they made it right. 

Having said this I can only encourage people to get financially literate. Brokers and charlatan educators rigging against you. They make huge money and you lose 90% of the time 90% of your money within 90 days.

I listed the risk factors already. This is only my personal opinion.

What factors could that be.

• Inflation
• Wage Inflation
• Money Supply
• Money circulation
• Housing bubble
• The Warren Buffet indicator
• China Regulations
• China Currency Manipulation
• China Delta Variance of Covid the huge wild card!
• WE MUST ADD WAR WITH CHINA to the equation, Taiwan

And I wrote about a few of them.

• Inflation
• Wage Inflation
• Money Supply
• Money Circulation

I made a research on the housing market and if we are in a bubble that is about to burst. I do not think so for the near future. But this is a very long analysis with lot of graphs that made me conclude that the housing bubble will NOT be the IED, not the roadside bomb that will bring the market down.

My biggest candidates for now are

• The China Delta Variance of Red Covid 19 the huge wild card!
• Chinas potential attack on Taiwan.
• Inflation and hence the start of tapering by the Feds.

For those reasons without explaining them any further I want to explain my perspective and the focus of my trades for the next six month.

I concluded that

1. The down side risk is growing and buying dips is getting too risky. I am closing my long positions slowly.
2. Tapering might start October and being announced in September during the FOMC Two-day meeting in September 21-22. 
3. This will take money out of the stock market and put it into the Bond Market. It will increase YIELDS and decrease Bond Prices. 
4. The FOMC said that they will start tapering with both, reducing the artificial demand for bonds and MBS. 
5. MBS, Mortgage Backed Securities are basically mortgages of smaller banks that their head quarters put together in a DEBT security and sold them to the FEDs. This is a 12 billion Dolla business per month increasing the debt burden of future generations. The banks convey the default risk to the Feds /tax payers and some interest from the mortgages. The original bank keeps a portion but very little risk. If the Feds stop buying those MBS they will give the risk back to the local banks and they will have to tighten their lending rules to reduce the increased risk of defaulting. Also this will reduce revenue with the loss of selling those MBS. Financial sector will cool down during tapering.
6. The Bond market will cool down too. Yields will rise. The Feds will reduce buying Bonds and hence the prices will fall. Since the prices of these assets are falling their yield (state guaranteed interest rate) will increase. When the yield of an assets stays the same but you pay less than face value of that asset then your yield goes up. The yield /(interest) is NOT bond to the selling price of that asset but to the face value printed on that NOTE or BOND. Thats why it is said when the Feds keeps buying bonds it keeps the prices artificially high, they are manipulated, to keep the yield down. And of course the smart money goes into the stock market. There is much more to make. Got it? 

   

   Here is the 10 years Bond yield 
   
   
7. The Stock Market will crash in a conflict with China. Foreign countries will take their money out of China stocks and the Asia region and flee to the US Dollar buying bonds. This bond buying might counter the yield a little. But all transactions will be conducted in USD. A conflict with China will shock the Asian markets.
8. An conflict with China will force the Feds to print more money to finance war efforts, especially if they continue over a longer period of time. It will put additional pressure on inflation during and after the war. A smaller regional conflict will not have a huge impact, as we experienced already. See image.
9. Either way, with tapering the US Dollar will rise due to the above mentioned traditional reaction.
10. With an increase of Interest rates, next year as the rumors are, the banking sector will do better. increased interest rates always benefit the banks.
11. A war over Taiwan and may be an attack on Israel by Iran or vis versa, will bring the oil and all commodity prices up big time. this will have a positive impact on oil prices and a negative impact on air travel, hotels and cruisers. 
    
    A review of 20 major geopolitical events dating all the way back to World War II showed stocks had fully recovered losses within an average of 47 trading days (10 weeks) after an average maximum drawdown of 5%, according to a CFRA study.
    
    
    
    An attack on Taiwan I consider more like of the level of the Iraq invasion or Pearl Harbor. It will send shockwaves through the market and reorganize priorities. China might be out of the window. It will have a huge impact. 
    
12. In the case of a conflict with China, not small Iran or their proxies, the US Dollar will gain in value. Why is that? Shipping routs will be interrupted. Heavily needed Commodity Prices will rise. Oil prices will rise and so do chemical products. The US dollar would rise because it is the reserve currency of the world, and a hedge against uncertainty. Almost all petrochemical contracts as well as oil and other commodities are denominated in the US dollar. The sole exception to this rule is China. A rising Dollar will be anti inflationary.
13. Contradicting this approach will be the wild card of the China Delta Covid. If there are more shut downs coming, more port closures and transportation chain bottle necks, inflation in the PPI and later in the CPI will increase. But the cocaine operation of the Feds (buying MBS and printing money) will continue and tapering will not start. Keep doing what we are doing, buy the dips. Then inflation will start to increase the pace, rate of inflation will rise. 

Conclusion

We have four levels. and each of them requires different actions

1. Inflation and hence the start of tapering by the Feds.
2. Cooling of the Money Velocity, M2V, and the increase of interest rates.
3. The Delta Variance, the huge wild card!
4. Chinas attack on Taiwan.

1. Inflation and hence the start of tapering by the Feds.

• Go long USD, buy UUP ETF, US-Dollar ETF
• Go Short AUD, Australia has a huge lockdown in place and its economy also is 20% depending on China. Shorting the Aussie looks good to me.
  
• Find an Currency ETF you can trust, USD / AUD and go long, not the other way around.
• Sell Bear Call Credit Spreads since the markets will rise slower and the strike might not be triggered. I chose Short Call 3 Standard Deviation OTM on the QQQ and SPY then Long Call for hedging $10 above that price. Maybe with tapering you could sell at 2nd standard deviation. I am not sure about this yet.

2. Cooling of the Money Velocity, M2V, and the increase of interest rates.

• Go long USD, buy UUP ETF, US-Dollar ETF, rising interest rates are good for the USD.
• Go Short AUD, Australia has a huge lockdown in place and its economy also is 20% depending on China. Shorting the Aussie looks good to me
• Sell Call Bear Credit Spreads since the markets (QQQ, SPY, IWM) will rise slower and the strike might not be triggered. I chose Short Call 2 Standard Deviation OTM on the QQQ and SPY then Long Call for hedging $10 above that price. 
• Buy Diagonal Put Debit Spreads. Go long PUT 1 standard Deviation OTM, 3 months DTE and to lower costs with buying the same PUT BUT with a shorter DTE (maybe 1 month) to cover costs, assuming that the strike will not be hit until in one month. Or Sell Calendar Spread 1 standard Deviation OTM.

3. The Delta Variance, the huge wild card!

If lockdowns are announced and the economic recovery seems to slow, stagflation, the Feds money will continue to flow. Inflation will rise and the Stock Market will rise. I will do the same as above but move my strikes for the credit spreads to the third Standard Deviation and reduce DTE from 45 days to 30.

• Additionally to what is said you can do the following. Maybe the better choice in short term.
• Buy a Call Diagonal Spreads with two different Strikes and Expiration Dates. Buy Call with a DTE, maybe one month. Buy it OTM, one StandDev.
  Sell a shorter term Call, maybe two weeks, further OTM, maybe 5$ for the QQQ to reduce costs. You expect the short position to expire worthless at date of Expiration and the long Call still continues in the money, ITM, for the next two weeks.
• Buy Calendar Spreads with the same strike but two different Expiration Dates, maybe one month and 14 days. Buy it OTM with one month DTE, Sell a shorter term Call further OTM, same strike to reduce costs. You expect the short position to expire worthless at date of Expiration and the long Call still continues since the strike price is not yet hit. So be careful choosing the Strike!

4. Chinas attack on Taiwan

• Go long Oil ETF, COG, CABOT OIL & GAS CORP; NRT, NORTH EUROPEAN OIL ROYALTY TRUST; 
• Refining companies
  
  
  
  
• Integrated Oil
  

  

  
  
  
• Sell shares in Chinese ETFs or companies, they will instantly lose value. Be conscious about the spread. Be careful not to buy options, they might not be respected. You can google them. Go large caps.
  
  
  
  
• Buy USD. It is said USD will rise and so inflation. A war with China there will be no doubt that they will pump money into the system. Inflation will rise and uncertainty of foreign countries will seek save harbor in the USD 

How to set up a Bear Call Spread will follow. I just cannot put this all into one article.

At least here is a guide line. Technicals are secondary but important.

Now we could look at the charts and look how to set up the trade since we know what to look for and we will listen to the news and watch the indicators to confirm our assumptions. Be careful at those times.

• SPY, S&P500 market index ETF
• DIA, Dow Jones Market Index, ETF
• IMW, Small Cap Russel 2000, ETF
• QQQ, NASDAQ, ETF
• VIX, Volatility Index, reacts inverse to S&P500
• AUM, AUD in USD Index
• UUP, USD, ETF
• AAPL Stocks as leading indicator for QQQ and SPY

Update AMC 8/19/2021

After the week was starting out stronger for the Apes as before Thursday ended with a very low trading volume. I expected more.

While AMC was increasing the average daily trading we noticed today that the volume cut out at around 27%. The Option trading volume reached about 75% of the Monday and Tuesday volume and only 60% compared to last Thursday.

There were about 300,000 options changing hands today, 60% of them were calls and 40% Puts. These numbers do not mean that those options were bought. They were sold and bought. What ended up in the OPEN INTERESTS shows you if there are an increase of positioned buyers and sellers. Thus, even there is a 60% call option trading it could mean they were excessively sold.

I walked the Sweet Spot of the Market Maker up from 34-36 in the beginning of the week to 35-36. And today it looks like it moved again slightly UP to 35-37. This is where the MM want to be tomorrow when about 112,000 options with a total estimated value of $119,000,000.00 will expire. The payout for the MM would be around 5.5 to 6.5 million Dollars only.

That the closing price ended below the sweet spot at 33.84 might show in my opinion that The Put buyers were outnumbering the call buyers. It could also mean that buying calls do not have the expected effect on the share prices, remember, you are buying a derivative, a contract and not the shares themselves, and hence the Market Maker is only forced to buy the shares if he needs to cover. This would influence the price upwards. But also notice the apes buy their lottery ticket on a weekly base and hence the options expire on every Friday. The market maker still have the shares from the week before and hence they just take you contract and sell the shares instead of buying because they might have a shotload of them already. And why I am saying it I have the feeling that the price of AMC drops easier with a 1:1 volume or even less than that. I expected the price dropping this week below 30.

Thus, buying call option might only have less price influence. And that’s why I strongly believe all 122,000 options will expire worthless inside the sweet spot tomorrow. 35-37. If AMC closes below 35 it would show me the increasing strength of put buyers.

Please also consider, any call option you buy tomorrow for next week will not have any effects on the price unless it is a huge volume because 75,000 x 100 shares expire and can easily be covered at closing with the excess on long positions. That’s why the price might move into the sweet spot and that’s it.

Also consider that for every call you buy there MUST be someone who is selling that call to you. That means if you are totally convinced the price goes up and buy there is another trader with the total conviction that the price will go down and sells. The MM only provides the liquidity and let the contracts expire. And they will settle with the Clearing House.

Call to Put Ratio for this week is 0.564 and for next week so far 0.69. Put buyers buying with a longer time horizon.

• At $45 we have a weak level of call options. About 5,000 contracts
• At $40 we have the strongest level with about 30,000 contracts
• At $38 another level with about 10,000 contracts.
• At $37 another stronger level of about 13,000 contracts
• At $36 about 5,000 contracts
• The Puts are scattered about a wider field. We find weak support levels at 35-6,500, 34-5700, 33-5700, and 32-5000 contracts.

It will be much easier to break below 30 since after $32 everything is open. Also all combined put levels make about only 80% of the $40 Call level.

The Crisis everybody is waiting for

There are several factors in the market that raise concerns. Each of which could have a huge negative impact on the economy and the stock market. Lets take a look at it to clear our vision. At least that is what I am doing. 

What factors could that be.

• Inflation
• Wage Inflation
• Money Supply
• Money circulation
• Housing bubble
• China Regulations
• China Currency Manipulation
• China Delta Variance of Covid
• The Warren Buffet indicator

In this episode I only will throw my thoughts in for a few things

The other items will be explained at a later time. I have a lot of other things to do. Trading is 90% research and only of 10% mouse clicking.

1. Inflation. CPI, the consumer price index, and the PPI, the producer price index.
   Certain stocks do better than other in an inflationary environment. If inflation hits too high consumer spending decreases and hence the demand shrinks and hence the economy starts to stagnate.
   We can see that the inflation rate is slowing (red), and the y/y rate (blue) is flattening.  But we will see next month. This is something to watch out for. Feds might start tapering earlier than next year.
   
   
   
   The Producer Price Index is at high a level and sitting there. This will only decrease when transportation, sea ports, can keep up with demand and if raw material and commodity costs will decrease. But this can take a while and I expect the PPI staying at this level for a while and hence costs will be past on to the consumer. Hence the Consumer Price Index will follow.
   
   
   
   
2. Wage Inflation. We should also take a quick look at the Wages and what they say.We can see that wages increased dramatically since May 2021 There is a shortage of labor. Labor is a commodity as everything else and the price follows supply and demand. But do not kid yourself. A company has to make profit and the labor is part of Cost of Goods sold, COGS. The company MUST increase prices to balance the wages increases. Thus, you wont make anymore money when you have to pay more at the till for what you buy!!! Wages increases mostly never benefit anyone, not the worker and not the company. The company become less competitive and the Worker pays more afterwards. The ONLY method to increase wages is by cutting taxes because taxes are NOT part of COGS and has no negative impact on companies. Just the opposite. With more money in the pocket the consumer starts more spending and that benefits the companies and they will produce more and hire more people. You see? Think about it. Your wage increase is not worth a dime with inflation. And wages increases drive inflation up! Thats why we advocate for smaller government, less regulations and less government spending.
   
   
   

   
   
   
   
3. Money Supply, M1, is the amount of Cash circulating the system. It includes the "Free Money" printed by the FEDs given out to people due to Covid. "Stimulus check". The day-to-day money like cash, coins and checking deposits. We can see that since Covid the money made a huge jump and supply still is increasing. There is an enormous amount of cash in the system but does it circulate?
   
   Also keep in mind that when people spend money and do not produce the demand increases but the supply decreases. Add to it the sea ports, transportation bottlenecks and the open jobs, and you know why inflation is increasing dramatically.
   
   
   
   
   
4. M1V is the velocity of Money. This is the speed of money in the circulation of the system. The day-to-day money like cash and coins. How many times a Dollar changes hand in a certain time period. A higher circulation rate or money flow indicates a greater economic activity, money is changing hands quicker. A slower rate of velocity indicates a sluggish or declining economy. Interesting to observe is that with Covid the money circulation fell out of the sky. Yes everybody was laid off. But when you  take a closer look the change q/q is still negative, which means the circulation of money in the economy is still slowing down even though at a slower rate! This means that with an increase in money supply at hand of people, we will see a decline in spending!! Not good for the economy. Give me the Retail Numbers.
   

   

5. M2 Money Stock includes M1 plus savings deposits, money market securities, mutual funds. This is one way the FEDs trying to keep the cocaine going. They buy MBA (Mortgage Backed Securities) and Bonds from banks in order to create more demand in order to keep bond prices up and the yields down. The 20 year Treasury Bond ETF, TLT from Barclays, i.e. With this the FEDs keep the money in the stock market. The bond prices are going up when the FEDs keep on buying. But with buying Bonds the yield (interests) are going down since you pay more for the fixed interest rate, which means the percentage of return per bond is shrinking because the yield stays the same but the price for the asset rises. It is an inverted relationship to the TBT. 
   
   In the M2SL supply we can see that with Covid there was an money injection. After the Covid the money injection accelerated and is increasing fast, more inflation. And we can assume that lot of this money is with the bank. You can walk into any bank and get a personal loan, because money is a liability for the bank, loans generating profits. We can further assume with all the said before that even the banks do not know in what tangible projects to invest. Where is the infrastructure bill going? There is nothing so far. It is all warm air from the Biden administration.
   
   Further reading at https://www.investopedia.com/terms/m/monetarypolicy.asp
   
   
   
   

Conclusion

Inflation is on the rise and will stay. Wages wont go back to before pandemic levels. Costumers also will get use to paying more for some items, like gasoline, energy and transportation, vacation.

The Producer inflation for raw material and transportation is also going up and will stay high for a long time.

Inflation cannot grow for ever and at such pace. The Feds have to start tapering soon. Then they will firstly reduc3e buying Bonds and MBA, which will drive the yield up. This also will cool the housing bubble a little since the banks are now required to carry the risks they could push to the FEDs by selling them MBAs. Mortgages will be harder to acquire. 

When the Feds starting to taper, they will reduce the flow of money, which is not yet increasing anyway, as we can see, they will battle inflation. What is your wage increase of 5.5% this year worth when the inflation hits 6%? Nada. You lose money. At the point of tapering the institutions will start moving money out of the stock market due to risks! And they will put it into bond and or Gold. If there is a crises developing that will include China and the Euro Zone they will also start buying US bonds the USD will rise.

This conclusion is preliminary. The housing bubble and other indicator will follow.

The Battle of the Apes, AMC

Thus, where to begin?

Following the Option trades and putting together an Excel sheet on a daily basis for AMC to get an understanding WHAT the numbers are telling you.

The trading volume was higher than usual. Yesterday about 180,000 contract and today about 190,000 contracts. Even though the apes could not break through the resistance level of $39-40. 

What happened on Monday?

Yesterday after market the Earning report for AMC came out. Their sales are up but only 10% of what it was pre-pandemic. And the uncertainty about the DELTA variance also has its negative impact on going to the theaters. AMC was losing big money pre-pandemic with a revenue of 5.5 billion Dollars.

AMC reported 22 million ticket sales in the first quarter, up sharply from its 7 million ticket sales in the first quarter and well below a record 97 million ticket sales in the second quarter of 2019. AMC reported $1.8 billion in cash and $2 billion in liquidity as of the end of June.
Dan Nathan said the thing that's unique about AMC is that 80% of the company’s stock is owned by retail investors rather than institutions.
“If I look at it from an institutional perspective, it’s uninvestable. They were losing money in 2019 before the pandemic when their sales were more than $5.5 billion,” Nathan said.
“Retail sees something very different in this than institutions.” You sell the rumor and you buy the facts. AMC spiked briefly and that was it. Price target for the most analysts did not change. 12 months target is averaged at $5.85 with a high target of $20.

WHY is it that the Apes cannot drive the stock price up?

Think about it, what they do. They are not investors. They are not day traders. They are not gamblers. They are lottery ticket buyers. The modern way of winning the lottery and hanging all your dreams on that ticket. Buy a ticket every week. One week we will go to the moon, bro.

• They buy one week terms only, 95%, which means their call options expire a few days down the road. Very few calls have a longer time horizon.
• You buy a call and the market maker buys the underlaying asset to cover his position. It is a married call or married put, if you bought put options.
• Now every week your calls expire and the MM sits on your shares!!! How many week does it take to fill up a truck with shares? None. They own already all the shares from mid of June and they only have to cover your calls very little or not at all. WHY?? Because they own them already. AMC is range trading and the market maker and your broker love it. You pay commission to the broker and the MM wins on the spread and slippage and keeps your money at the end of the week. Lovely job!!!
• You are just tossing money down their throat. Look at Goldman and Sachs earnings and where they make their money.
• With a dwindling trading volume and a range trading in place the stock goes nowhere.
• You have to buy more shares than the Market Makers are holding. Thats why I say the downside is more promising because there were never too many Put options. 
• Also to consider, the apes went to other stocks, Like Hobin Rood, another scam.

Conclusion and the take outs.

In the beginning of the squeeze there was the surprise! There was momentum. There was trading volume. There was "All Apes on board we are going" I made good money too but I cling on the outside with a parachute and let go when momentum goes down. Then you play the other side.

Now we have to have patience, There is no momentum, it is dwindling. The trading volume is falling. Apes go to other banana trees.

This week,

Trading volume is up big time but still not enough. We will see tomorrow. This I think will be the biggest thing to watch.

There are more PUT Options out there this week than we saw it before. the ratio is 1.5, which means for every Call there are 1.5 PUTs. But as before their perspective is base on a one week horizon. Cheapies. They have no money or they dont believe in their own trading skills. Maybe there are none?

The Market Maker Sweet Spot

The market maker will try to keep the price within the Sweet Spot. And they easily can do that. Even with a huge volume Monday and Tuesday, which drove the price up because also the MM need to react and coordinate with their buddies, they drove the price right down where they want to have it. This game is rigged against the retail trader and there is nothing to complain about it. Learn it and deal with it. Do not buy short term options. Only if you hedge them with a calendar spread.

Outlook and conclusion

So we can say that the huge trading volume this week establish the Avenger Apes. Those Apes who turn their back on the Ape Army. The level at $34 is important and then $30 and then $26. But when you look at next week they all disappear. The levels are not strong either. We have seen three times  open interests at those levels. 24,000 contracts. Now we dont make 8,000 and the week is half way in. 

I believe even with this higher trading volume, that the price cannot break $40. The Apes need a March on Rome, like in the beginning. They dont have it. Fact. They could have done it in the past six weeks. They didnt do it. 

I dont think we will break below $30 this week. Probably we will stay right in the MM Sweet Spot trading volume permitting!

But before you take my word do your own analysis. 

End of Week approaching with AMC. Whats going on?

This week was a sliding down the slope for AMC . As predicted it didnt go below $30. And it will not do tomorrow. It just dipped below 30 for one hour just to come back into the profitable range for the Market Makers.

Tuesday the trading volume with Calls vs Puts, was 136% Puts. The tide keeps turning.
Wednesday the trading volume hit 90% CPR , Call to Put Ratio. The Bears are gearing up to push AMC further down.
The Open Interests "CPR", is sitting at 58.66% for this week according to my data and they might vary from broker to broker or data provider to data provider. Nevertheless, they will be outside the range of error.
This week seems bearish and so does next week. Even Apes seldom buy anything beyond their immediate sight, open interests in Put contracts are at 90%. Very high

The least losses, hence the biggest profit for the Market Makers will be in between < $38 - > $33. We have a huge amount of Put contracts sitting at the $30 level. I call it a level now since the puts are concentrated at $30. It is not a spread out "zone".

The price of AMC will not go above $36 with a trading volume of 60% of the average. These Calls are all wasted money, landing in the pockets of Goldman and Sachs. As I said many times before and just think about it, You need an exceptional volume to drive the price up exceptionally in short terms. And buying Call options on a week to week base is super short term trading. Remember there has been above 700 million shares traded to drive the price up on a daily base in May. Now we are creeping at around 60 million. This is 10% of the original squeeze volume . 10%, bro!!

This rocket ship to the moon has no fuel loaded. It is an empty decoy to lure in your money as liquidity for the early Apes. You go in and they get out. They sell to you their seat for a lot of money and they know the tank is empty. They will take your money, guaranteed. If they wont go out, all of you lose over time. To push a car up hill, especially if it is a steep hill, you need a lot of horsepower, fuel or ropes for pulling. Just holding the ropes wont do it and thus, it will roll back.

The Call options at $34, 36, 40 , 45, 50 will disappear tomorrow. The Market Maker cash in, you lose your bet and the Market Maker will own all the long shares. NOW, for them to be sure they will drive the price down with you if you start buying PUT Options. They will cover the underlaying and short AMC . The price goes down and when you take profit they buy AMC back for a lower price and do their profit too, on the slippage and the broker on the commission.
BUT, remember they are sitting on a truck load of long positions and they want to dump them. Thus, the speed downhill will be faster!! Take my word for it.

Since 7, seven, weeks the Ape Army is losing their battle. They cannot drive the price up!! What makes you think they will do it next week?
I am open to think outside the box but you have to come up with some data, any data to support your opinion.

Volume

• In May the trading volume was 380 million up to peak at 750 million PER DAY!!
• In June it dropped to 300 million a day as a high point.
• In July we had 170 million in average and now we barely reach 50% of that.

What you think is going to happen? You think the volume you need to increase the price significantly, and I just mean by 15 Dollars, can be done with 100 million shares daily? Or do you think it will go up by mystical Pixie dust?

RSI

The RSI is showing a divergence since mid of June after AMC peaked beginning of June. The technical aspect.

MACD

MACD is a lagging Momentum indicator to confirm your technical, at least for me. Also here we have a divergence going on in the dailies. The only studies I use.

SMA 5 and 20

In the daily charts we also see that the MA5 broke below the monthly MA, whcih is the SMA20.

I use SMA5, and SMA20, SMA 5 is the weekly base of 5 trading days and there are 20 trading days in a months and so are 250 trading days in a year. I can clearly see if the average of AMC on a weekly base is breaking below the monthly average!

Support and Resistance levels

• The only Support level sits at $30 with 25,000 Put contracts for now.
• The Resistance levels sit at $34, 5,000 Call Contracts.
• The Resistance levels sit at $36, 6,000 Call Contracts.
• The Resistance levels sit at $40, 6,500 Call Contracts.
• The Resistance levels sit at $45, 5,000 Call Contracts.
• The Resistance levels sit at $50, 5,500 Call Contracts.

All (98%) of which will expire this Friday, 6th of August, 2021.

Nevertheless, Fundamental analysis is king and will eventually prevail when people running out of money and losing interest.

Conclusion

Now that we saw the first time that AMC broke through the $29 level it shows me the direction where the Market Maker and the Avenger Apes want to walk. It will not break on Friday. Maybe not even on Monday. Remember, Tuesdays and Wednesday are the important days for options.

For the Bulls this is not very encouraging and next week we might see the further decline. We will see where they place the puts. Three things I will watch out for daily.

• The volume as discussed. Everything below 100 million shares trading volume is nothing. 100 million on the Call Option Side only.
• Unusual Option Trading at the end of a day from Barchart. Compile it in your Excel and eliminate duplicates and keep those options that were mentioned before but not maybe this day. You will see R and S level pretty clearly.
• I will calculate the Sweet Spot of the Market Maker and keeping in mind that they are sitting on a train loads of AMC shares ready to sell at any price. This will create an additional downward pressure when the Revenger Apes start buying Puts. 
• All indicators and studies are lagging. Keep that in mind. They only confirm or deny what you already know.