Speculative Short Traps

US All Sectors

Recently, Erik and Donald Jr. were involved in what looks like a retail short trap / pump & dump setup which we mark on our event charts with a double-pain red event window called a forced-state transition (FST). When I say short trap, I mean retail shorts.

Here was the setup prior to the trap and squeeze and today’s chart post the play. As you can see the stock moved just after entering the FST. ΔL (purple) tripped a few times at local minima yielding decent returns and -ΔL (yellow) tripped once before a 25% fall.

It is interesting that ΔL did not trip before this latest event.

How this trade played out was it consolidated prior to the shelf registration (diamond followed by red dashed line). The registration triggered a drop in bid pressure and was shorted. The the trap was set with the initial 400% run leading into an offering (red dot) that was concomitant with the real move.

These sorts of plays are ubiquitous to the the market no matter what broader economic conditions are. Dominari Holdings is interesting just for the Trump’s involvement. These plays are fairly common.

I screened the data base for stocks currently in the leading state, i.e. preceding a potential short-trap / P&D.