earnings news from amazon and alphabet the important january jobs report and washingtons discussion of stimulus could all be important to markets in the week ahead but none of it is likely to get more attention than the short squeezes driven by retail investors stocks had a rocky week with the sp 500 down 33 to 3714 the sp was down 11 for january its first negative month since october and a warning for the year according to the old wall street adage we were due for some type of decline weve been straight up since october its not unusual that were backing off a bit said steve massocca managing director at wedbush securities trading could remain bumpy in the coming week as the sp 500 struggles to hold above 3716 its 50day moving average and a key technical level this is the first time were at the 50day moving average since early november said peter boockvar chief investment officer at bleakley advisory group its just a level we havent seen in a while and its an important first line in the sand of whether the market uses this as a pivot spot to bounce again the buy the dip mentality doesnt die easy but if you break that 50day that portends something else he said massocca and others see little impact on the broader market from the phenomena of retail investors piling into stocks that are being shorted by big investors fueled by no fee trading retail investors created a flurry of trading in gamestop and other heavily shorted names like amc entertainment if the stocks rise in theory the firms that are short sellers will have to buy stock to cover and that activity could drive the price even higher in a socalled short squeeze gamestop was the poster child for that trade this past week gamestop shares closed 68 higher on friday bringing their gain for the week to 400 the retailers shares hit a high of 483 on jan 28 this is somewhat isolated massocca said of trading in gamestop and other shorts he said it may not be a phenomena for that long since there arent that many heavily shorted stocks i think they may be hunting new names the short squeeze story has garnered broad interest in the general news media and from washington lawmakers from both parties are eager to look into the fact that robinhood and other online brokers restricted trading in the hottest short names when trading was frenzied robinhood said it was responding to sec rules on net capital requirements and clearinghouse deposits that brokers have to comply with this was the busiest week for earnings reported with 82 of the companies reported better than expected earnings its a really good quarter but obviously overshadowed by the short squeeze news said leo grohowski chief investment officer at bny mellon wealth management he said some of the biggest tech names have been lagging like apple and microsoft the combination of demanding valuations and short squeeze news has overshadowed a really good performance of corporate earnings so far grohowski said were constructive on the market fundamentals do look encouraging to us strategists have expected a pullback in the first part of the year and many say it would become a buying opportunity hedge funds did sell long positions in the past week but firms like morgan stanley and barclays say the deleveraging is not likely to have a big impact on stocks but for investors who end up buying in at the end of the short squeezes they could feel some pain i do think this isnt going to end well said grohowski these kind of one way trades they dont end well particularly for those that come later to the party i think this will be one of those he said gamestop is not worth what it is trading for today i do believe at the end of the day the value of a company is important and its going to be driven by fundamentals these dislocations and distortions of value they will correct and many will be hurt by that but grohowski said its encouraging that the surge in retail activity was driven by younger investors weve wanted for some time for this younger generation to be more interested in the financial markets and equity investing he said i know a lot of experienced market participants were not anticipating it being this way its not just a one time kind of distortion i think this is thoughtprovoking in terms of a way a younger generation might be looking at investing by their rules not the rules of the traditional market participants grohowski added he expects the january employment report to get some attention friday and it should be weaker with just 50000 to 60000 jobs added he said the markets will also monitor the progress of stimulus discussions in washington as valuations have risen on expectations of a package coming soon president joe biden has proposed 19 trillion in spending but republicans are not in agreement