Short squeeze

So if physical oil is at 130 or 140 or whatever it is, that's what they'll pay.

that will be a short squeeze.

And it's one of the mechanisms that can cause the paper price to catch up to the physical price very, very fast.

Now, the next question is, what happens to the market? This is not the first time in US history where there was an oil crisis because it's happened before.

Let's start with utilities.

We talked earlier about the short position in XLU, and at the time there were a lot of shorts, which set up conditions for a short squeeze.

Today looks like a similar squeeze, a big bullish candle on high volume, gapping up with almost no wicks.

I'll flag this again, this is not an improvement in fundamentals.

Meme stocks just made it extremely visible.

Another important thing to understand is the role of short selling and short squeezes in meme stock narratives.

A lot of people were introduced to these concepts for the first time through memes and viral posts.

At a basic level, a short squeeze happens when investors who have bet against a stock are forced to buy it as the price rises, which pushes the price even higher.