**Warning: This is a very risky play, trade at your own risk**
Hello, All!
If you are not familiar with this saga, feel free to catch up:
[First Mention](https://www.reddit.com/r/stocks/comments/k3p4bc/when_will_the_gme_squeeze_happen_answers_here/)
[Short Squeeze Explanation and Initial Thoughts](https://www.reddit.com/r/stocks/comments/k688qv/for_those_who_dont_understand_the_inevitable/)
[Timeline and Predictions](https://www.reddit.com/r/stocks/comments/kaa2qh/gme_either_squeezes_or_gets_delisted_who_will_win/)
[GME Short Squeeze What Comes Next Part 1](https://www.reddit.com/r/stocks/comments/laln2m/gme_short_squeeze_what_comes_next/)
[GME Short Squeeze What Comes Next Part 2](https://www.reddit.com/r/stocks/comments/lbuhp0/gme_short_squeeze_what_comes_next_part_2/)
[GME Short Squeeze What Comes Next Part 3](https://www.reddit.com/r/stocks/comments/lgkm5t/gme_short_squeeze_what_comes_next_part_3/)
[GME Short Squeeze What Comes Next Part 4 (Micro Update)](https://www.reddit.com/user/hooman_or_whatever/comments/lm92zw/gme_short_squeeze_what_comes_next_part_4_micro/)
GME Short Squeeze What Comes Next Part 4
Before we get into what happened today I would like you all to know that I have sadly closed my position. I sold at the top today and then wanted to buy back in at the bottom but forgot about a little thing called wash sales. That being said when I purchased at 147 my cost basis was actually showing at ~250. Now, this is just for tax purposes however it was factored into margin and completely eliminated me from other trades and would have kept me sidelined for quite some time. I made the decision to close my position entirely and put a large sum of my capital into ACTC which will be my next DD. Sadly, I need to wait 30 days for the wash sale to wear off before I could re-enter GME. This bars me from participating in any upcoming squeezes without substantial risk and it prevents me from entering a long position prior to the 3/25 Earnings Report. This is very sad news indeed. However, I am extremely interested in what is happening and will continue monitoring the situation. I might play options although they are entirely to hard to predict, but I will be re-entering as soon as the wash sale wears off.
Side note: I am feeling better but not well enough to film, so for those who have been waiting for videos this week I do apologize, I will have content coming out as soon as I am able to record.
So let’s talk about today
Well, if you read my last DD (Part 4) today went exactly as expected all the way up until the end. There was one crucial part I missed and that was the top of the downward channel which was $170. I kept mentioning $200 as an important number but completely disregarding the top of the channel.
Alright, so pre-market kind of went sideways and that seemed to bode well for us. At open we saw a massive dip, my prediction was that this would be a sell-off of profit taking and bag holders leaving with their original investment. I still maintain that belief. We found the bottom at around $102 which was impressive to me so the following bounce seemed natural. We had several halts along the way and I want to clarify to everyone that this is completely normal.
Halting trades happens for those of us who can’t be behind a computer at all times. It gives us a moment to catch up and make our decision. It also prevents a price from plummeting due to panic selling as it essentially pauses the trade to let people calm down and orders hold off for a second. It works well in the opposite direction to prevent FOMO from kicking in and prices rising to irrational heights quickly.
I think a majority of the price action today was a combination of poorly positioned shorts covering and FOMO for a second squeeze. That in conjunction we scalpers and day traders, I think we simply had a lot of people playing this for profits on this push which gave us the volume and buying power we needed to surpass certain levels.
We tested a few places on the way up, and some of those tests were rejected. The volume was able to push us through after 1-3 attempts. However, we met with the top of the channel, the $170 mark and at that point, we had no more gas, we had no more volume. We simply couldn’t break through, there was a false break which brought us to the days high, but not enough to truly break out. If we did break it we would have been met by the massive sell wall at $200 which we surely would not have had the volume to break. We then were completely exhausted and were forced down significantly. In short, today was not our day.
There is a silver lining, even with AH we somehow ended up finishing over $106. This gives me hope. Let’s immediately hop into what comes next.
So…what comes next?
All of the catalysts mentioned in Part 4 are still in effect, this has not changed. There are still many shorts sitting above $200 and some probably opened positions on the way down again.
Tomorrow there is something still interesting to me. The fact that we ended over $100 and options expire tomorrow makes me thing there is still gas in this rocket to go for a second push tomorrow. No bears, no one really, could have expected this to close over $100 today, so a lot of calls are dangerously ITM. Tomorrow will be an all out assault for sure to try to drive the price as low as possible prior to the options expiring. Not only will this assault need to be dealt with, but nothing has changed with the $170 channel ceiling or the Wall of Troy at $200. Be warned folks, this is a battle. It is winnable, but a battle indeed.
Without a known catalyst, this will be extremely difficult to win. Many things could happen, from whales jumping in to last minute news such as Cohen being named CEO (a leading theory regarding Ryan Cohen’s mysterious tweet).
Tomorrow, I expect the opposite reaction from today. Before I elaborate I would like to remind everyone: I am not a financial advisor, nor am I a wizard. I could be completely wrong about all of this. So please, do your research, make your decisions. Don’t base your financial choices off of my one opinion.
I digress, I expect an opposite reaction tomorrow with all the diamond handed apes riding whales screaming war cries in their final push before entering the gates of Valhalla. So I expect a massive run-up right at open. The question is…will it be enough? Pay close attention to volume tomorrow and pay close attention to important resistance points we say today: 135, 152,155, 170.
If volume low, that means everyone is waiting for everyone else to do something; this is assuredly a losing strategy. There will need to be a significant amount of volume to break through the first wall at 135. Hold on.
To make this more clear it is actually good to think of this like war. Imagine volume as the number of troops you have and imagine each resistance point as a gate you are storming. If you don’t have the troops (volume) to break through the first gate (resistance point), you will need to regroup (consolidate) and try again. But each of these attempts uses more and more troops (volume), which means less (troops) to fight break through the following gates (resistance points).
So pay attention to volume and pay attention to resistance points and how many attempts you are taking to break each one. Without a general (a catalyst/whale) this will be a very difficult and potentially bloody battle tomorrow.
From the oppositions perspective, they have two options. They could either bring troops out to meet you (try to force the price down right at open) or they can sit behind their gates and hold the line (bull trap). As I mentioned before, my guess is they will bull trap, why? Because that’s what I would do. If we knew you couldn’t break the 170 resistance on the first attempt with your whole army, why would we be concerned about reaching it with less troops? Again, volume is key to monitor.
If you see low volume + sharp price increase, it is likely the bull trap I am expecting, so have buy orders ready to go near resistance points and don’t waste your resources trying to climb to them.
If you see high volume + sharp price increase, then they probably sent troops out to meet you but you are winning.
If you see low volume + sharp price decrease, then it seems your reinforcements haven’t arrived and you will need a miracle to save you.
If you see high volume + sharp price decrease, then they are winning.
If you are driven back then at least you are driven to reinforcements (IE: If the price is sent downward then it will be a good buying opportunity for more people to jump in and help the fight). Again, volume here is key. If you see a bounce back, make sure the volume is high enough to justify it, otherwise you are charging back into battle without enough reinforcements and will certainly lose.
After Tomorrow
Until April I see potential for a squeeze, one even larger than the first. But every day that passes, every micro-squeeze in between weakens our side. Play it smart. Sell at what you think is the top, buy back in at the bottom. Rinse. Repeat. This gives each person more and more capital on every attempt. Placing buy orders around the resistance points to help break down the gates is essential. I want to clarify here, the only people who should be playing this are ones who are long on GME to begin with. At some point, this will all settle down, come back to Earth and you will be left with a lot of shares (especially if you keep selling and re-entering).
The reason this works is because it’s literally exactly what the shorts want. The shorts want a short squeeze. Yeah see, I said it. Everyone on every side is profiting on this phenomenon aside from the few casualties (bag holders) caught in the crossfire. They drive the price down by shorting it, then they cover to help trigger the short squeeze. You all ride it on the way up allowing them to open new very favorable positions not possible on other stocks and they ride it back down. The cycle continues.
This is going to be the unfavored opinion, but the notion of diamond handing it til death isn’t a winning tactic unless you have the capital to continue adding at the bottom. To win the war, that capital must be generated and what better way than this infinite game of profitable yo-yo?
Diamond handing worked when there was 226% short interest and that is no longer the case.
Diamond handing does not force a short squeeze, it only did the first time due to these conditions.
Diamond handing worked because the shorts would be screwed if there was no one to buy their shares anymore, this is no longer reality. People are willing to sell their shares, if the price action doesn’t convince you of that I don’t know what will.
There is only one way to force a short squeeze. Power. Buying power that is.
Again, I am not giving advice. This is my perspective and how I think a squeeze is possible WITHOUT a catalyst.
TL;DR: I am not a spreader of FUD, I am a realist. If you are going to continue playing GME then you should find a way to profit from it. Volume is key. Important prices are: 135, 150, 155, 170, 200. The potential for tomorrow squeezing certainly exists with us finishing off at $106. They would have needed to send it much lower to make this be over. However, without a catalyst it will be a difficult battle indeed. This very well may have been the second squeeze, but as I mentioned in Part 4, I don’t expect it to be the last one if it is, in fact, over.
*Disclaimer: I am not a financial advisor, I am bullish on GME, this is a risky trade, thanks for reading.*