#1: GVIP has dominated the S&P 500 in performance over the last week
Some context:
GVIP is an ETF that tracks popular hedge fund long bets.
Below is a chart that compares the 5 day performance of the GVIP ETF vs the S&P 500.
https://preview.redd.it/1h510wt7zwf61.png?width=1096&format=png&auto=webp&s=492289c4e6f30184c160a133188a3e9331e17f7d
Over the last week (Friday last week to Thursday this week) GVIP has outperformed the S&P 500 by 2.3%. That's a TON. Furthermore if you do the same comparison for Monday this week to Thursday the outperformance of GVIP rises to approximately 4.4%, for Monday-Friday the outperformance was 2.3%
To put this into perspective look at the historical performance of these two side by side since Jan 1st 2017 (essentially inception of GVIP) and you can see that GVIP in the past has modestly outperformed the s&p 500 with GVIP returning on average (roughly) 1.69% per month and the S&P 500 returning on average (roughly) 1.12% per month (A total of 127% gain for GVIP and a 73% gain for S&P 500 over \~49 months). 2%+ out performance over a short period of time (a week or less) is massive variance to the long term monthly averages.
https://preview.redd.it/ygm5yajozwf61.png?width=1240&format=png&auto=webp&s=d9000948cfa0326740c27e4dc98118d416441906
My hypothesis here: Hedge funds have been increasing short bets (on gamestop and other stocks) and plowing the cash they are receiving from the short sales into their favorite stocks. This pumps GVIP higher explains some of the difference in short term performance
#2: Short Volume has increased as a percent of total volume
First up its important that I note the different between short VOLUME and short INTEREST. Short volume refers to the number of shares sold/bought in short trades each day. Short interest is the total outstanding number of shorted shares.
A large increase in short volume as a percent of total volume indicates that something is going on. As you can see from the chart below this new activity started on 12/27 (the day that gamestop had the highest price) and continued. While its hard to tell what is actually going on here it looks like there has been a paradigm change
My thesis/opinion: Short sellers have been doubling down with the recent price increases. A combination of a high amount of short selling (as a percent of total volume) and lower liquidity is fueling the current price drop
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#3: Price changes in gamestop stock seem to be strategically timed with short interest reports
Every 15 days the SEC requires shorts sellers to report their positions. This information is then made public 7 days later. It just so happens that 1/29 was the reporting date for short interest (to be published 2/9). I've placed 4pm on 1/29 on a chart of gamestop below:
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https://preview.redd.it/7wf4nfhg0xf61.png?width=1242&format=png&auto=webp&s=6dbefb85fe92c694ca2765112c8c64fdac48eac0
My opinion: Short sellers want to give the impression that they closed their positions - so that we get paper hands. To do this they exited (or pretended to exit by substituting their positions for naked sold call options) leading up to the reporting deadline. Now they may have started to re-enter those positions
#4: Anecdotal evidence
4a: People have been posting screencaps to this subreddit that shows overwhelming good sentiment for gamestop stock. One of the things I've seen pop up on this sub lately is the total volume of buy/sell orders from retail brokerages. These have been skewing very positive still. If its not the retail investors selling, then it must be institutions either exiting long positions or starting new short positions
4b: The diamond hands on WSB are real, and sentiment has been fairly positive