GME magnum opus update: theory confirmation today?
Greetings apes, please see my post from yesterday where I use my hypothesis that GME is repeating its early January price and volume action. YOU WILL NOT UNDERSTAND THIS IF YOU DON'T LOOK AT IT. This is based on the idea that GME has been in a nasty FTD cycle since last year, so we can use previous prices to predict future prices. Again, do not take this as fact and do not get tied to predictions. This is simply my opinion based on my research and it very well could be wrong. I am not a financial advisor, this is not financial advice.
Update on the Theory
To recap, my thesis is that GME is currently following the same price action as early January (exact dates from January below) and that because of that, it will be following this same pattern:
I currently believe that GME is in the exact same spot as it was in on January 11th. Here is my data backing that up:
GME price and volume action from 12/28-1/8 and 4/5 - 4/16:
This is a summation of what I posted yesterday. The crux of this is that price and volume have been fractally repeating because of the FTD cycle and that the price repetitions are now uncanny. We can see that last Wednesday - Friday is almost identical to the Wed - Fri January time frame that I covered. If this theory is correct, then today (4/19) should follow the same price and volume action as 1/11. AND WOULD YOU LOOK AT THIS (1/11):
This shows a significant gap up in price and volume. The gap up in price is not higher than the price was before the week-long dip. Here, you can see exactly the same thing is happening today (at 10am). Obviously, the day is not finished so this is incomplete, however, there was a gap up in price that was not higher than prior to the week-long dip. Though it appears that volume is lower, it's only 10am and volume is on pace to be significantly higher than both Thursday and Friday, just like 1/11:
More similarities
In my previous post, I said that the 1/11 increase was due to an SEC filing about GME. Here's that filing: https://www.globenewswire.com/news-release/2021/01/11/2156168/0/en/GameStop-Announces-Additional-Board-Refreshment-to-Accelerate-Transformation.html
The filing is about accelerating their digital transformation and making changes to their leadership. TODAY, we got information that GME's CEO would be stepping down soon. This rise also might have been on the tailwinds of DFVs epic double-down. Either way, the catalysts were similar. Notably, this was one of the last major catalysts in January, and the price simply rose due to media coverage and momentum alone, which is why I called it the start of the squeeze (the point of no return).
The future
If my theory is correct, then tomorrow should be an extremely flat day in terms of price (should be slightly negative) and volume should decrease significantly. The peak of the week should be on Wednesday, which should be characterized by an almost unseen increase in volume and the biggest single-day price increase in months. Then, volume should taper off slightly the rest of the week while price continues to rise (but not rapidly). If all of this happens, then we are weeks away from the MOASS. Again, this is just a theory, do not take it as fact.
EOD Update:
We ended the day at 164.37 and volume was at about 10.5m, which is more than the previous two days just like 1/11. I would've liked to see more volume today and for us to have held that gap up better. I still think there is a chance that we have a correlation here. Tomorrow should be a relatively flat day on low volume. Wednesday will definitively tell us if this theory is right or not. I will make a new post updating everything tomorrow. In the meantime, I used TOS OnDemand to see the minute chart of 1/11 and have posted it below to compare to today. Price action seems similar (large gap up pre-market, super high volume at market open, volume and price then fade off the highs for the rest of the day):
1/11:
Today:
Now that's what I call an IV crush
Finally, just want to reemphasize that tomorrow means nothing in terms of proving this theory. If GME is light on volume and flat on price, that is not an indication that this theory is correct, it just isn't an indication that it's wrong. If GME rises or falls significantly then we have proof that the theory was wrong. As I said above, Wednesday is the definitive test as to the merits of this theory.
For context, here is the timeframe that I am comparing. Everything to the left of the red line has already happened so far and we seem to be following a similar trend. Note that today we had a gap up in price, higher volume than the previous two days (but nothing extraordinary in terms of volume), and significant premarket movement.
As I said in the comments, I will be posting another one of these with updates tomorrow, so stay tuned for that. I will also be definitively telling apes when I believe that the theory is wrong based on evidence. If I never tell you that, then I guess we've established residence at tendietown.
Posted Apr 19, 2021, 2:09 PM UTC · edited